FY2006 Supplemental Appropriations: Iraq and Other International Activities; Additional Hurricane Katrina Relief

FY2006 Supplemental Appropriations: Iraq and Other International Activities; Additional Hurricane Katrina Relief

Order Code RL33298
CRS Report for Congress
Received through the CRS Web
FY2006 Supplemental Appropriations:
Iraq and Other International Activities;
Additional Hurricane Katrina Relief
Updated June 15, 2006
Paul M. Irwin, Coordinator
Specialist in Social Legislation
Domestic Social Policy Division
Larry Nowels, Coordinator
Specialist in Foreign Affairs
Foreign Affairs, Defense, and Trade Division
Congressional Research Service ˜ The Library of Congress

FY2006 Supplemental Appropriations:
Iraq and Other International Activities;
Additional Hurricane Katrina Relief
Summary
On February 16, 2006, the Administration submitted two separate FY2006
supplemental appropriations requests. The first, totaling $72.4 billion, would fund
ongoing military operations in Iraq and Afghanistan ($67.9 billion), and State
Department operations in Iraq and various foreign aid programs, including additional
assistance for Iraq ($4.2 billion). The other supplemental would provide $19.8
billion for recovery and reconstruction activities in hurricane-affected Gulf Coast
areas. Thus, Congress considered a combined spending proposal of $92.2 billion.
For the military component of the supplemental, several issues arose in
Congress, including whether DOD’s funding requests for training Afghan and Iraqi
security forces were necessary in light of the pace of implementation, how to make
transparent the DOD assumptions about military personnel levels for active-duty and
reserve forces that underlie the request, whether DOD could better contain increases
in operating costs, and whether DOD’s investment request financed peacetime as
well as wartime needs.
The supplemental proposal for international matters covered a range of activities
that were either not addressed in the regular FY2006 appropriations, addressed
circumstances that had changed since passage of the regular spending measures, or,
like military operations in Iraq and Afghanistan, have been largely funded through
supplementals rather than incorporated into the “base” of annual, on-going
diplomatic and aid operations. The request of $1.6 billion in Iraq stabilization
assistance was the first sizable aid package for Baghdad since Congress approved
$18.45 billion in the FY2004 emergency supplemental measure. Other foreign policy
elements included funding for U.S. diplomatic costs in Iraq and Afghanistan,
reconstruction aid for Afghanistan, democracy promotion programs for Iran, Darfur
humanitarian relief and peace implementation aid in Sudan, Pakistan earthquake
reconstruction, Liberia refugee repatriation, and food aid for Africa.
For hurricane recovery, half the funds — $9.9 billion — were designated for the
Department of Homeland Security, mostly for the Federal Emergency Management
Agency (FEMA). The Department of Housing and Urban Development would
receive $4.4 billion, most of which would be used for community planning and
development. DOD would receive $1.8 billion and the Army Corps of Engineers
$1.5 billion, primarily to be used for flood control and coastal emergencies,
procurement, and construction. The Small Business Administration would receive
$1.3 billion for loans to homeowners, renters, and businesses.
On March 17, 2006, the House passed a $91.95 billion supplemental
appropriation measure (H.R. 4939; H.Rept. 109-388), $270 million less than
requested by the Administration. On May 4, the Senate approved its version totaling
$108.9 billion, $16.8 billion more than the request. Congress cleared on June 15 for
the President’s signature a $94.5 billion supplemental package, $2.3 billion above the
request.

Key CRS Policy Staff
Subject
Name
Telephone
E-Mail
Iraq Military Operations & International Affairs Supplemental:
Coordinator for Iraq Military Operations &
Larry Nowels
7-7645
lnowels@crs.loc.gov
International Affairs Supplemental
Department of Defense
Amy Belasco
7-7627
abelasco@crs.loc.gov
Iraq State Department Operations
Susan B. Epstein
7-6678
sepstein@crs.loc.gov
Iraq Reconstruction
Curt Tarnoff
7-7656
ctarnoff@crs.loc.gov
Afghanistan
Kenneth Katzman
7-7612
kkatzman@crs.loc.gov
Iran
Kenneth Katzman
7-7612
kkatzman@crs.loc.gov
Sudan/Darfur
Ted Dagne
7-7646
tdagne@crs.loc.gov
Pakistan
K. Alan Kronstadt
7-5415
akronstadt@crs.loc.gov
Hurricane Recovery Supplemental:
Coordinator for Hurricane Recovery Supplemental Paul M. Irwin
7-7573
pirwin@crs.loc.gov
Agriculture
Ralph Chite
7-7296
rchite@crs.loc.gov
Army Corps of Engineers & Flood Control
Nicole T. Carter
7-0854
ncarter@crs.loc.gov
Community Development Block Grant, Dept. of
Eugene Boyd
7-8689
eboyd@crs.loc.gov
Housing & Urban Development (HUD)
Defense Operation and Maintenance, and
Amy Belasco
7-7627
abelasco@crs.loc.gov
Procurement, Department of Defense
Education hurricane recovery programs
Rebecca R. Skinner
7-6600
rskinner@crs.loc.gov
Federal Emergency Management Agency
Keith Bea
7-8672
kbea@crs.loc.gov
(FEMA), Dept. of Homeland Security
Fish and Wildlife Service, Dept. of the Interior
M. Lynne Corn
7-7267
lcorn@crs.loc.gov
Historic Preservation Fund
Susan Boren
7-6899
sboren@crs.loc.gov
Low-Income Home Energy Assistance Program
Libby Perl
7-7806
eperl@crs.loc.gov
Military Construction
Daniel H. Else
7-4996
delse@crs.loc.gov
National Oceanic and Atmospheric Administration Wayne Morrissey
7-7072
wmorrissey@crs.loc.gov
Small Business Administration (SBA), Disaster
N. Eric Weiss
7-6209
eweiss@crs.loc.gov
Loans Program
Tenant-Based Rental Assistance, HUD
Maggie McCarty
7-2163
mmccarty@crs.loc.gov
Transportation
John Frittelli
7-7033
jfrittelli@crs.loc.gov
Sidath Viranga
Veterans Affairs
7-0623
spanangala@crs.loc.gov
Panangala
Blas Nunez-Neto
7-0622
bnunezneto@crs.loc.gov
Border Security
Jennifer Lake
7-0620
jlake@crs.loc.gov
John Frittelli
7-7033
jfrittelli@crs.loc.gov
Port Security and the DP World Purchase
James K. Jackson
7-7751
jjackson@crs.loc.gov
Pandemic Influenza Preparedness
Sarah A. Lister
7-7320
slister@crs.loc.gov

Contents
Most Recent Developments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Overview . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Summary of Congressional Action . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Defense Issues . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
Conference Action . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
Senate Action . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
House Action . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
International Issues . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
Conference Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
House Action . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
Senate Action . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
Hurricane Recovery and Other Domestic Issues . . . . . . . . . . . . . . . . . . . . . 14
Conference Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
House Action . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
Senate Action . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
Border Security: Administration and Senate Proposals . . . . . . . . . . . . . . . . . . . . 19
Congressional Action . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
American Port Security and the Dubai Ports World Operational Control of
Six U.S. Terminals . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
Congressional Action . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
Defense Supplemental . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
Potential Issues in DOD’s FY2006 Supplemental Request . . . . . . . . . . . . . 25
Afghan and Iraq Security Forces Funds: Obligations Slower
Than Anticipated . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
Coalition Support . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
Commander’s Emergency Response Program (CERP) . . . . . . . . . . . . 30
Iraq Freedom Fund . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
New Joint Improvised Explosive Device Defeat Fund . . . . . . . . . . . . 30
Military Personnel Request and Visibility of Personnel Plans . . . . . . 31
Operation and Maintenance Funding Rises Substantially in
FY2006 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
Investment Funding Grows in FY2006 Without Clear Overall
Rationale . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
Research and Development Emphasizes Improvised Explosive
Devices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
Military Construction Request . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
Flexibility Issues: Transfer Limits . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
Intelligence Community Management Account . . . . . . . . . . . . . . . . . 41
International Affairs Supplemental . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41
U.S. Diplomatic Mission Operations in Iraq . . . . . . . . . . . . . . . . . . . . . . . . 45
Congressional Action . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45
Iraq Stabilization Assistance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46

Congressional Action . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49
Afghanistan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49
Congressional Action . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 51
Iran . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52
Congressional Action . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 53
Sudan — Darfur and Other Sudan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 53
Darfur Crisis . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 53
The North-South Peace Agreement and Aid for Non-Darfur Sudan . . 56
Pakistan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 57
Congressional Action . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 58
Other Foreign Assistance Proposals . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 58
Congressional Action . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 58
Hurricane Recovery and Disaster Supplemental . . . . . . . . . . . . . . . . . . . . . . . . . 60
Overview . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 60
Department of Agriculture . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 62
Congressional Action . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 63
National Oceanic and Atmospheric Administration . . . . . . . . . . . . . . . . . . 64
Congressional Action . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 65
Small Business Administration . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 65
Disaster Loans Program . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 66
Congressional Action . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 66
Defense Department Supplemental for Repairs, Rebuilding, and
Help for Shipbuilders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 66
Congressional Action . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 68
Who Should Pay for Higher Costs Due to Delays in Shipbuilding . . . 69
Congressional Action . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 70
Military Construction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 74
Congressional Action . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 75
Request for Increased Flexibility to Transfer Funds . . . . . . . . . . . . . . 75
Other Funding for Hurricane Damages . . . . . . . . . . . . . . . . . . . . . . . . 75
Army Corps of Engineers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 75
Congressional Action . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 77
Department of Homeland Security . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 78
Federal Emergency Management Agency . . . . . . . . . . . . . . . . . . . . . . 79
Congressional Action . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 80
Other DHS Activities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 81
Congressional Action . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 81
Department of the Interior . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 81
Fish and Wildlife Service . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 82
National Park Service, Historic Preservation Fund . . . . . . . . . . . . . . . 82
Other Interior Activities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 83
Congressional Action . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 83
Department of Education . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 83
Department of Veterans Affairs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 85
Medical Center, New Orleans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 86
Congressional Action . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 86
Department of Transportation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 87
Department of Housing and Urban Development . . . . . . . . . . . . . . . . . . . 89
Community Development Block Grants . . . . . . . . . . . . . . . . . . . . . . . 89
Congressional Action . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 90
Tenant-Based Rental Assistance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 92

Congressional Action . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 92
Other Departments and Agencies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 93
Department of Justice . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 94
Congressional Action . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 94
National Aeronautics and Space Administration . . . . . . . . . . . . . . . . . 95
Environmental Protection Agency . . . . . . . . . . . . . . . . . . . . . . . . . . . . 95
Congressional Action . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 95
Armed Forces Retirement Home . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 95
Congressional Action . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 96
General Services Administration . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 96
Congressional Action . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 96
Low-Income Home Energy Assistance Program . . . . . . . . . . . . . . . . . 96
Other Departments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 97
Other Titles for Disaster and Related Assistance . . . . . . . . . . . . . . . . . . . . . 97
Pandemic Influenza Prevention and Preparedness . . . . . . . . . . . . . . . . 98
Appendix A — Department of Defense FY2006 War-Related Supplemental
Request and Prior Funding by Account . . . . . . . . . . . . . . . . . . . . . . . . . . . 100
List of Tables
Table 1. Summary of FY2006 Supplemental Request . . . . . . . . . . . . . . . . . . . . . 2
Table 2. War-Related Defense Amendments: Senate Action . . . . . . . . . . . . . . . 8
Table 3. War-Related Defense Amendments: House Action . . . . . . . . . . . . . . 11
Table 4. International Amendments: House Action . . . . . . . . . . . . . . . . . . . . . . 12
Table 5. International Amendments: Senate Action . . . . . . . . . . . . . . . . . . . . . . 14
Table 6. Hurricane Recovery Amendments: House Action . . . . . . . . . . . . . . . . 16
Table 7. Hurricane Recovery and Other Domestic Amendments: Senate
Action on Selected Amendments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
Table 8. Defense Department War and Occupation Appropriations,
FY2004-FY2006 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
Table 9. Average Monthly DOD Budget Authority for War and Occupation,
FY2005 Enacted-Revised FY2006 Request . . . . . . . . . . . . . . . . . . . . . . . . 26
Table 10. Department of Defense FY2006 War-Related Bridge
Supplemental and FY2006 War-Related Supplemental Request . . . . . . . . 27
Table 11. State Department and Foreign Aid Funds in FY2006
Supplemental . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42
Table 12. Iraq Stabilization and State Department Operations . . . . . . . . . . . . . . 47
Table 13. Afghanistan Aid Supplemental . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50
Table 14. Sudan Supplemental . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55
Table 15. Pakistan Supplemental . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 57
Table 16. Summary of FY2006 Supplemental for Hurricane Recovery and
Disaster Assistance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 61
Table 17. FY2006 Disaster Supplemental for Agriculture . . . . . . . . . . . . . . . . . 63
Table 18. FY2006 Hurricane Supplemental for the National
Oceanic and Atmospheric Administration . . . . . . . . . . . . . . . . . . . . . . . . . . 64
Table 19. FY2006 Hurricane Supplemental for Small Business . . . . . . . . . . . . 65
Table 20. FY2006 Hurricane Supplemental for Defense . . . . . . . . . . . . . . . . . . 66
Table 21. FY2006 Hurricane Supplemental for the Army Corps of Engineers . 76
Table 22. FY2006 Hurricane Supplemental for Homeland Security . . . . . . . . . 79
Table 23. FY2006 Hurricane Supplemental for Interior . . . . . . . . . . . . . . . . . . . 82

Table 24. FY2006 Hurricane Supplemental for Education . . . . . . . . . . . . . . . . . 84
Table 25. FY2006 Hurricane Supplemental for Veterans Affairs . . . . . . . . . . . 86
Table 26. FY2006 Hurricane Supplemental for Transportation . . . . . . . . . . . . . 88
Table 27. FY2006 Hurricane Supplemental for HUD . . . . . . . . . . . . . . . . . . . . 89
Table 28. FY2006 Hurricane Supplemental: Other Departments and
Agencies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 94

FY2006 Supplemental Appropriations:
Iraq and Other International Activities;
Additional Hurricane Katrina Relief
Most Recent Developments
On June 15, the President signed H.R. 4939 (P.L. 109-234), legislation
providing $94.52 billion in emergency supplemental spending for military operations
in Iraq and Afghanistan, foreign assistance in support of the war on terror and other
international crises, additional relief for victims of Gulf Coast hurricanes, and other
matters. The Senate approved (98-1) the conference report (H.Rept. 109-494) also
on June 15, while the House passed the measure on June 13 (351-67). The total
supplemental is about $2.3 billion higher than the President’s request but within the
limit the President said was acceptable in order to avoid a veto of the legislation.
Previously, the House had approved a $91.95 billion supplemental, while the Senate-
passed measure totaled $108.9 billion. The size of the Senate bill had prompted a
veto threat from the White House.
For war related costs in Iraq and Afghanistan, H.R. 4939 provides $65.86
billion, roughly the same level as requested. The enacted bill, however, is about $1.9
billion less than passed earlier by the House and Senate, a reduction that serves as an
offset for the addition of $1.9 billion to fund the President’s border security initiative.
The other major reduction to the Administration’s request is $1 billion less to train
and equip Iraqi and Afghan security forces.
The conference agreement includes $4.25 billion for foreign assistance and the
State Department, including $3 billion for aid and U.S. mission operations in Iraq,
$66 million for democracy programs in Iran, and $618 million for humanitarian
support in Sudan. The overall foreign aid and State Department package is about the
same as the President proposed, but the conference agreement reduces amounts for
Iraq and Iran by about $215 million and $9 million, respectively. The bill, however,
increases emergency aid for Darfur and southern Sudan by $104 million. The
conference bill also drops a Senate provision that would have rescinded $47 million
in previously appropriated economic aid for Egypt.
H.R. 4939, as approved by conferees, provides $19.3 billion in additional relief
for victims of Gulf Coast hurricanes. Included in this total is $5.2 billion for
Community Development Block Grants, as passed in the Senate, and $1 billion more
than the House and the request. The measure appropriates $3.7 billion for levee
repair and flood control projects, a level about $300 million below the Senate, but
slightly above the President’s amended proposal. The largest reduction in the
hurricane relief portion of the supplemental is for FEMA. H.R. 4939 provides $6

CRS-2
billion for a variety of disaster recovery and relief activities, $1.2 billion less than the
revised Administration request and $4.4 billion below the Senate level.
Other major issues settled by conferees include:
! Border security — fully funds the President’s $1.9 billion amended
request adding 1,000 new Border Patrol Agents and facilitating
National Guard deployments along the southern border;
! Avian influenza preparedness — includes $2.3 billion to prepare for
and respond to the threat of a possible pandemic outbreak. The
Senate had approved $2.7 billion, an amount not requested by the
Administration but the President said he would accept this
congressional add-on;
! Agriculture drought assistance — provides $500 million for farmers
in the Gulf Coast region affected by last year’s hurricanes. The
Senate had proposed $3.9 billion.
Overview
On February 16, 2006, the Administration submitted two separate FY2006
supplemental appropriations requests. The first, totaling $72.4 billion, would fund
ongoing military operations in Iraq and Afghanistan ($67.9 billion), non-DOD
intelligence operations ($0.3 billion), State Department operations in Iraq and various
foreign aid programs, including additional assistance for Iraq ($4.2 billion), and other
counter-terrorism funding for other agencies ($12 million). The other supplemental
would provide $19.8 billion for recovery and reconstruction activities in hurricane-
affected Gulf Coast areas. Subsequently, the White House revised its request on
April 25, proposing an additional $2.2 billion for the Army Corps of Engineers to
assist in post-Katrina recovery efforts, an amount offset by a $2.2 billion reduction
in funding requested for FEMA’s Disaster Relief Fund. The President further revised
his supplemental request on May 18, asking for $1.95 billion to support an enhanced
border security initiative, a proposal offset with cuts to the original DOD
supplemental recommendation. Thus, Congress considered a combined spending
proposal of $92.2 billion, as shown in Table 1.
The request for Iraq and Afghanistan military operations continued the
Administration’s practice of funding these activities through supplementals rather
than in regular DOD appropriations. Congress, however, did approve a $50 billion
bridge fund for Iraq in P.L. 109-148, the Defense Department FY2006 appropriation,
to cover early FY2006 costs of military spending until a supplemental could be
considered by Congress and enacted. Thus, the total amount of existing and
proposed appropriations for military and intelligence operations in Iraq, Afghanistan
and other global war on terrorism for FY2006, was $117.9 billion. This compared
to about $99 billion approved for FY2005 and $67 billion for FY2004.

CRS-3
The supplemental proposal
Table 1. Summary of FY2006
for international matters covered a
range of activities that were either
Supplemental Request
not addressed in the regular
($s — billions)
FY2006 Foreign Operations and
Req.* House Senate Conf.
State Department appropriation
Military ops:
measures (Darfur peacekeeping,
Iraq,
Pakistan earthquake relief), where
Afghanistan,
circumstances have changed since
& Global War
passage of the regular spending
on Terror
$65.92 $67.72 $67.67 $65.86
measures (Iran democracy
State Dept. &
promotion and various refugee and
Foreign Aid
$4.23
$4.06
$4.45
$4.25
food crises), or have been largely
Intelligence
funded through supplementals
and other war
rather than incorporated into the
on terror
$0.44
$0.38
$0.39
$0.30
“base” of annual, on-going
diplomatic and aid operations
Hurricane
(Iraq reconstruction and U.S.
relief and
embassy support in Iraq). The
reconstruction $19.76 $19.11 $28.81 $19.34
request of $1.6 billion in
Low Income
stabilization assistance for Iraq
Home Energy
was the first sizable aid package
Assistance
—
$0.75
—
—
for Baghdad since Congress
Agriculture &
approved $18.45 billion in the
Drought
FY2004 emergency supplemental
Assistance
—
—
$3.96
$0.50
m e a s u r e . F u r t h e r , t h e
Pandemic
Administration seeks about $750
Influenza
—
—
$2.59
$2.30
million for Iraq in its regular
FY2007 Foreign Operations
Port Security
—
—
$0.65 —
budget.
Border
Security
$1.95 —
$1.90
$1.90
The $19.8 billion for
Veterans
recovery and reconstruction in the
Medical
Gulf Coast region follows
Services
—
—
$0.43 —
enactment last year of two
FY2005 supplementals of $10.5
Other
—
—
$0.03
$0.06
billion (P.L. 109-61) and $51.8
Defense
billion (P.L. 109-62) for hurricane
Offset
—
—
($1.90)
—
relief.1
TOTAL
$92.22 $91.95 $108.90 $94.52
Totals may not add because of rounding.
Conference totals are estimates.
* Request includes Administration revisions of
April 25 and May 18, 2006.
1 Additional resources for hurricane victims have been made available through the
(continued...)

CRS-4
The President requested that the entire amount of both supplementals be
considered “emergency” appropriations, a designation that would exempt the funds
from any limitations contained in the FY2006 Budget Resolution. Nevertheless, the
supplemental adds to the size of the U.S. budget deficit. The Administration did not
seek any offsets from other previously approved spending that could have the effect
of reducing the supplemental’s impact on the deficit, although revisions to the
original request were offset with reductions in the initial supplemental proposal.
Some Members argued that some or all of the supplemental appropriation should be
off set. Especially as the size of the Senate version of the emergency supplemental
grew during committee and floor consideration, calls for offsets or the removal of
spending for matters other than the Iraq war or hurricane relief intensified. Some
Senate-passed amendments included corresponding offsets for new spending items
— such as the amendment by Senator Gregg to add funds for border security, with
an equivalent reduction in Defense Department appropriations. But many did not.
As noted elsewhere, despite not proposing any offsets to the original $92.2 billion
request, President Bush said on several occasions that he would veto the legislation
if the final version exceeded his proposal, although he would allow increases for
pandemic influenza preparedness.
Summary of Congressional Action
As cleared for the President on June 15, H.R. 4939 provides $94.52 billion
emergency supplemental spending for military operations in Iraq and Afghanistan,
foreign assistance in support of the war on terror and other international crises,
additional relief for victims of Gulf Coast hurricanes, and other matters. The House
passed the conference agreement on June 13 (351-67) and the Senate on June 15 (98-
1). The total supplemental is about $2.3 billion higher than the President’s request
but within the limit the President said was acceptable in order to avoid a veto of the
legislation. Previously, the House had approved a $91.95 billion supplemental, while
the Senate-passed measure totaled $108.9 billion. The size of the Senate bill had
prompted a veto threat from the White House.
For war related costs in Iraq and Afghanistan, H.R. 4939 provides $65.86
billion, roughly the same level as requested. The conference agreement includes
$4.25 billion for foreign assistance and the State Department, including $3 billion for
aid and U.S. mission operations in Iraq, $66 million for democracy programs in Iran,
and $618 million for humanitarian support in Sudan. The overall foreign aid and
State Department package is about the same as the President proposed, but the
conference agreement reduces amounts for Iraq and Iran by about $215 million and
$9 million, respectively. H.R. 4939, as approved by conferees, provides $19.3 billion
in additional relief for victims of Gulf Coast hurricanes. Included in this total is $5.2
billion for Community Development Block Grants, $3.7 billion for levee repair and
flood control projects, and $6 billion for a variety of disaster recovery and relief
1 (...continued)
Department of Homeland Security Disaster Relief Fund and through assumed tax savings
for people affected by the disaster. See below for further discussion of complete hurricane
recovery measures and funding.

CRS-5
activities, $1.2 billion less than the revised Administration request and $4.4 billion
below the Senate level. Other major issues settled by conferees include $1.9 billion
for the President’s border security initiative, $2.3 billion for Avian influenza
preparedness, and $500 million for farmers in the Gulf Coast region affected by last
year’s hurricanes.
In previous congressional action, on March 17 (H.R. 4939; H.Rept. 109-388),
the House provided $91.95 billion in supplemental funds, $270 million less than the
Administration’s request. The legislation reduced the defense portion of the
supplemental by $137 million, cut international programs by $166 million, and Gulf
Coast hurricane relief by $658 million. H.R. 4939 further made available in FY2006
$750 million for Low Income Home Energy Assistance that had previously been
appropriated for FY2007. This action, which was not requested by the
Administration, raised the total funding level of the bill. In addition to trimming the
President’s proposal, the House-passed measure included a provision that would
block the sale of operations at five American port terminals to the UAE-based Dubai
Ports World.
The Senate-passed version of H.R. 4939 increased the overall size of the
legislation to $108.9 billion, $16.8 billion over the request and $17 billion higher
than the House. The bill provided $67.7 billion for military operations in Iraq and
Afghanistan,2 and $4.45 billion for State Department and foreign assistance
programs, roughly at the levels requested. The legislation further provided $28.8
billion for hurricane related expenses, about $9 billion more than proposed. The
Senate also included several provisions unrelated to either military operations,
international affairs, or hurricane reconstruction, including $2.3 billion for pandemic
influenza preparedness, nearly $4 billion for agriculture disaster and economic
assistance, $650 million for port security, and $1.9 billion for enhanced security at
American borders that was offset with cuts for defense spending in the bill.
President Bush threatened to veto the legislation because of the added spending,
although the White House said it supported the pandemic influenza appropriation,
and would accept a bill that did not exceed about $94.5 billion. During floor
consideration, the Senate acted on several amendments that proposed to reduce
various items in the bill, but in most cases the amendments were defeated, tabled, or
withdrawn. For example, Senator Coburn submitted an amendment cutting 19
separate programs proposed by the Senate Appropriations Committee totaling over
$2 billion. In individual votes, the Senate approved one element of the Coburn
amendment — cutting $15 million for the National Marine Fisheries Service to
implement seafood promotion strategies — but tabled an item that would have
2 The actual figure for Defense costs in Iraq and Afghanistan is something less than the
$67.7 billion figure. During floor debate, the Senate passed an amendment by Senator
Gregg providing $1.9 billion for border security operations, offset by a 2.775% unspecified
cut in defense monies for both the Iraq war and Hurricane Katrina. Because the Defense
Department would have discretion to distribute the cut, it is not possible to say what the total
for war costs in the Senate bill would be. If the entire reduction was applied to war
expenditures, the Senate total could be as low as $65.8 billion, or as high as $67.6 billion
if the reduction was taken exclusively from DOD hurricane damage funds. The total for war
costs could also fall somewhere in between this high and low range.

CRS-6
deleted $700 million to relocate a CSX freight rail line further inland from the Gulf
Coast and defeated a proposal to delete Section 2303 that would broaden the Navy’s
liability for higher shipbuilding costs associated with business disruption. Senator
Coburn withdrew that remaining 16 divisions of his amendment.
The Senate further rejected an amendment by Senator McCain reducing
agriculture assistance by $74.5 million. The Senate also tabled an amendment by
Senator Thomas that would have replaced the committee text of the bill with the
President’s request, plus funding for pandemic influenza preparedness and border
security (with offsets), thereby reducing the bill’s total cost to $94.5 billion, and an
amendment by Senator Ensign that would have required the bill to be recommitted
to the Appropriations Committee with instructions to report back legislation not
exceeding $94.5 billion.
Other amendments passed by the Senate are set out below in tables and
discussed in detail.
Defense Issues
Conference Action. Conferees, following a Senate recommendation, cut $2
billion from the Administration’s defense request to finance border security needs.
But unlike the Senate position, the conference agreement allocates those cuts to
particular accounts. Most, but not all, of the cuts are taken from procurement as
requested by the Administration, but conferees also reduced the amounts to train the
Afghan and Iraq Security Forces by $1 billion. The Administration opposed this cut
but conferees argued that DOD could not use all of the funding requested within the
fiscal year.
The conference agreement also adopts the Senate proposal to consolidate all
funds to develop ways to defeat Improvised Explosive Devices (IEDs) in a new Joint
Improvised Explosive Defeat fund and gives DOD the authority to transfer those
funds to individual accounts with a reporting requirement to Congress within 60 days
of enactment, and then every 30 days thereafter, on how the funds will be spent.
Since most of the funds for IEDs were requested in operation and maintenance
(O&M) accounts, the conference version shows a lower total for O&M even though
the conferees largely approved the service requests.
In the case of war-related military construction, the conference agreement
approves $235 million, deleting funds for several projects in Bagram, which OMB
withdrew without explanation, and reducing funds for an IED bypass road in Iraq, the
utility of which both houses questioned. Conferees expressed some frustration with
the Administration’s actions in changing its mind about whether certain projects were
truly emergencies.3 The enacted bill drops a Senate provision that prohibited
construction of permanent U.S. bases in Iraq or U.S. control of Iraqi oil resources or
infrastructure.
3 Congressional Record, June 8, 2006, p. H3613-p.H3614.

CRS-7
In section 1213, conferees endorse the Senate’s resolution calling on the
Administration to submit requests for war-related funds after FY2007 in the annual
budget rather than in supplementals.
Senate Action. During floor debate, the Senate passed the Gregg amendment
(S.Amdt. 4939) which provided $1.9 billion for border security operations,
construction and procurement offset by a 2.775% unspecified cut in defense monies
for both the Iraq war and Hurricane Katrina. Because the Defense Department would
have discretion to distribute the cut, it was not possible to say what the total for war
costs in the Senate bill would be. If the entire reduction was applied to war
expenditures, the Senate total could be as low as $65.8 billion, or as high as $67.7
billion if the reduction was taken exclusively from DOD hurricane damage funds.
The total for war costs could have also fallen somewhere in between this high and
low range.
The Senate appropriators also cut $207 million from the $67.9 billion request
for war funds compared to a House cut of $137 million. Except for the Gregg
amendment, the Senate bill, like the House, largely redistributed funds with increases
being mainly offset by cuts.
In addition to the Gregg amendment reduction, significant war-cost-related floor
amendments considered in the Senate included:
! an amendment by Senator Byrd (S.Amdt. 3079), adopted 94 to 0,
that as in previous supplementals, stated a sense of the Senate that,
after FY2007, the Administration should submit requests for funds
for ongoing military operations in Iraq and Afghanistan in the
regular budget covering the entire fiscal year and including detailed
justification;
! an amendment by Senator Biden adopted by voice vote (S.Amdt.
3717 as modified by S.Amdt. 3855) that prohibited the use of any
funds in the bill to establish permanent military bases in Iraq or
exercise U.S. control over Iraq’s oil infrastructure or resources; a
House amendment by Congresswoman Lee prohibited the use of
funds to negotiate a basing agreement with the government of Iraq
(see below).

CRS-8
Table 2. War-Related Defense Amendments: Senate Action
Sponsor
Purpose/Congressional Record Page Reference
Vote
Gregg
Added $1.9 billion for operating, procurement, and
Agreed
construction expenses for border security offset by a $1.9
59-39
billion cut to DOD’s monies for war and Gulf hurricane
expenses (pp. S3532-S3542).
Coburn
Deleted Section 2303 broadening Navy’s liability for
Rejected
higher shipbuilding costs associated with business
48-51
disruption (pp. S3864-S3869).
Biden
Prohibited use of funds to establish permanent military
Agreed
bases in Iraq or U.S. control of Iraqi oil or oil
voice vote
infrastructure (pp. S3937, S3942-S3943, S3948-S3949).
Byrd
Sense of the Senate that Administration should submit cost
Agreed
of military operations for Iraq and Afghanistan in the
94-0
regular budget after FY2007.
Chambliss-
Required comprehensive DOD report on mortuary
Agreed
Isakson
procedures.
voice vote
Warner
Provided authority to heads of any federal agency to
Agreed
provide benefits equivalent to those of the Foreign Service
voice vote
to civilian personnel detailed to Iraq or Afghanistan.
Durbin and
Provided that federal employees activated to serve in the
Agreed
others
military would receive pay equal to their civil service pay.
voice vote
Salazar
Added requirement to cover training to reporting
Agreed
requirement on Improvised Explosive devices.
voice vote
The Senate bill also differed from the House bill because it:
! reduced the $5.9 billion request to train, equip, and provide
infrastructure to Afghan and Iraqi security forces to $5.6 billion —
a more modest cut than the $4.8 billion House level — but added a
proviso that no funds could be spent on infrastructure until “after the
formation of the unified Iraqi government;”4
! established a new $1.958 billion transfer fund, the “Joint Improvised
Explosive Device Defeat Fund,” that would centralize funds that are
in three separate accounts in the request, with Congress to receive a
spending plan within 90 days of enactment;
! added procurement funds to keep the Abrams tank modification line
and the C-17 cargo aircraft lines open, accelerate V-22 production,
and buy more Predator UAVs that would be largely offset by cuts to
other programs;
! added military personnel funds for recruiting and retention
incentives and for higher death benefits for service members who
4 S.Rept. 109-230, p. 22.

CRS-9
died between May 12 and August 1, 2005 who are made eligible in
the bill; and
! cut $200 million from military construction projects in Afghanistan
and Iraq, calling for projects to be limited to those that “immediately
support operations,” and reducing funding for projects that could
signal a permanent U.S. presence in Iraq.
The Senate Committee also cited considerable concern about DOD’s
procurement requests because of the lack of standard budget information on
requirements and schedules. Like the House, the Senate Committee reduced DOD’s
requested transfer limit from $4 billion to $2 billion. Otherwise, the Senate
Committee basically approved the request.

House Action. The House-passed supplemental reduced the Department of
Defense’s $67.9 billion request for war costs by $137 million overall, but
redistributed the funding among the various titles. The major changes made by the
House were to:

! reduce the $5.9 billion request to train, equip and provide
infrastructure for Afghan and Iraqi security forces by cutting $1
billion intended for infrastructure for police forces, citing inadequate
justification;
! increase funds for procurement to $17.7 billion by adding $1.3
billion more primarily for upgraded tanks and HMMWVs;
! cut $600 million from Operation and Maintenance (O&M) funds,
providing $32.1 billion, close to the request;
! increase military personnel funding by $340 million to $9.9 billion,
largely to restore a cut to DOD’s regular FY2006 funding; and
! cut military construction by $162 million, reducing the total to $323
million by rejecting various projects.
With the exception of these changes, the House measure largely approved the
Department’s request. The House Appropriations Committee, however, placed a
hold on spending for $990 million for military infrastructure for Afghan and Iraq
security forces until DOD submits a detailed project level plan. The committee cut
by half DOD’s requested ceiling on transfer authority to $2 billion and rejected the
request to allow transfers to or from military construction accounts. Citing
dissatisfaction with information provided by DOD, the House panel also required
several additional reports. The committee further set a $3.571 billion floor on
funding in the bill for National Guard and Reserve programs to prosecute the global
war on terror (GWOT).
During floor debate, the House considered several amendments affecting
defense issues but none changed the $67.7 billion for the Department of Defense
approved by the House Appropriations Committee. The House:

CRS-10
! agreed to an amendment by Representative Barbara Lee that would
prohibit the United States from using funds in the act to enter into a
basing agreement with the government of Iraq. Members focused
on differences among statements by various Administration
spokesmen about whether the United States would have permanent
bases in Iraq.5 Although the United States does not currently have
any basing agreements with Iraq, the Defense Department has
invested about $746 million in military construction funding in Iraq,
another $126 million in neighboring countries supporting the Iraq
mission, and another $322 million in bases supporting both Iraq and
Afghanistan.6 The House approved $225 million, cutting the DOD’s
request by $123 million (see below). If the House level is approved,
DOD would have invested about $1.1 billion in bases in or in
support of the Iraq mission (not including bases supporting both Iraq
and Afghanistan). Secretary Rumsfeld recently testified that some
“30 U.S. military bases have been returned to Iraqi control or closed
altogether.”7
! agreed to an amendment by Representative Millender-McDonald to
redirect Defense Health funding to training in orthotics and
prosthetics.
! rejected (193 to 225) an amendment by Representative Waxman to
prohibit the Army from spending any funds in the act with any
contractor where the Defense Contract Audit Agency had judged to
be unreasonable more than $100 million of contract costs.
Supporters argued that new contracts should not be signed with
contractors where auditors found unreasonable costs while others
raised concerns about whether not renewing current contracts could
disrupt the military’s logistical support.8
! sustained a point of order against an amendment by Representative
Kaptur that would set up a Truman type commission that would
investigate government contracts for military operations and
reconstruction in Iraq and Afghanistan and relief and reconstruction
contracts for Hurricane Katrina.9
5 Congressional Record, March 16, 2006, p. H1107ff.
6 CRS calculations based on appropriations reports and other sources.
7 Secretary Rumsfeld testifying before the Senate Armed Services Committee, Hearing on
Defense Authorization, February 7, 2006, transcript.
8 See Congressional Record, p. H1101-H1104.
9 See Congressional Record, p. H1098.

CRS-11
Table 3. War-Related Defense Amendments: House Action
Sponsor
Purpose/Congressional Record Page Reference
Vote
Lee
Prohibited using funds in act to enter into a basing rights
Agreed,
agreement with Iraq government (pp. H1101-H1104).
voice vote
Millender-
Redirected funding for Defense Health by $20 million to
Agreed,
McDonald
increase training for prosthetics and orthotics in U.S.
voice vote
schools (p. H1013).
Kaptur
Set up a “Truman”-type House Commission to investigate
Point of
government contracts for military operations and
order
reconstruction in Iraq and Afghanistan and Hurricane
sustained
Katrina relief and reconstruction (pp. H1098-H1099).
Waxman
Prohibited spending Army funds with any contractor if the
Rejected
Defense Contract Audit Agency has found that more than
193-225
$100 million of costs are unreasonable (pp. H1101-H1104,
and H1110-H1111).
International Issues
Conference Agreement. As approved in the enacted bill, H.R. 4939
provides $4.25 billion for State Department and international assistance activities.
This level is slightly higher ($26 million) than the President’s request, and about
midway between levels previously approved by the House and Senate. Major
changes from the executive’s request or versions passed by the House and Senate
include:
! Iraq stabilization aid and U.S. mission support in Baghdad is set at
$3.04 billion, roughly $200 million less than the request. Most of
the reduction is for Provincial Reconstruction Team support;
! Iran democracy, broadcasting, and student exchange programs are
funded at $66 million, midway between House and Senate levels and
$9 million below the request;
! Darfur peacekeeping and humanitarian assistance receives $499
million, the same as the House and Senate but $110 million less than
the request;
! Liberia economic aid totals $63.8 million, up from the $13.8 million
request;
! Haiti receives $20 million, half the amount approved in the Senate.
The House and request did not include funding for Haiti; and
! Jordan receives $50 million, less than the Senate level of $100
million. There was no request or funding in the House bill.

CRS-12
House Action. In total, the House-passed measure cut the international
portion of the supplemental to $4.1 billion, $66 million less than requested. In most
cases where reductions were made, the House Appropriations Committee stated its
view that the emergency nature of the requests were not fully justified and that the
Committee will address the issues again when it considers the regular FY2007
appropriation proposal. Major items and changes to the Administration requests
included:
! reductions in USAID security and operation costs in Iraq,
Afghanistan, and Sudan;
! cuts in security for Provisional Reconstruction Teams in Iraq, but
full funding for other State Department operational costs in Iraq and
Afghanistan;
! near-full funding for Iraq stabilization assistance, with the
redirection of $26.3 million from some prison and judge security
funds to counter-narcotics programs in Colombia;
! Substantial cuts in Afghan reconstruction and debt relief proposals;
! a reduction from $75 million to $56 million for democracy and
related programs in Iran;
! full funding for southern Sudan and Darfur, plus an additional $110
million for peacekeeping operations in Darfur, for a total Sudan
package of $618 million;
! full funding for Pakistan earthquake relief and emergency food
refugee aid for Africa;
! an additional $50 million in economic aid for Liberia; and
! $26.3 million for the purchase of DC-3 aircraft for Colombian drug
interdiction efforts.
Table 4. International Amendments: House Action
Sponsor
Purpose/Congressional Record Page Reference
Vote
Shays
Directed that $20 million of economic aid funds for Iraq be
Agreed,
used for the Community Action Plan program (pp. H1016-
voice vote
H1017).
Burton
Redirected $26.3 million of Iraq funds for counter-narcotics
Agreed,
activities in Colombia (pp. H1067-H1068).
250-172
Capuano
Increased by $50 million funds for peacekeeping operations
Agreed,
in Darfur (p. H1068).
213-208
Garrett
Cut $5 million for public diplomacy programs in Iran
Rejected,
(pp. H1069-H1070).
75-344
Garrett
Cut $5 million for education and cultural exchanges for
Rejected,
Iranian students (p. H1070).
78-343
Foxx
Cut $36.1 million for broadcasting into Iran (pp. H1070-
Rejected,
H1071).
88-333

CRS-13
Senate Action. As passed, the Senate version of H.R. 4939 largely funded the
Administration’s request for international programs, with some exceptions. The
Senate bill provided $4.45 billion for international affairs, an increase of $220
million over the request. Concerning major items and changes to the request, the
Senate measure:
! cut security funding for Provisional Reconstruction Teams in Iraq;
! further reduced State Department operational costs in Iraq by $60
million in order to add an additional $60 million for support of U.N.
peacekeeping in Darfur;
! fully funded Iraq stabilization assistance, with an earmark of $96
million for broad-based democracy programs;
! did not provide the House-passed counter-narcotics funding for
Colombia;
! included $3.3 million for demobilization assistance in Colombia;
! fully funded southern Sudan and Darfur, with an additional $110
million in funding for peacekeeping in Darfur, the same as the
House;
! added $50 million for economic aid for Liberia, the same as the
House;
! added $42.5 million for various Migration and Refugee Assistance
programs in Somalia, the Horn of Africa, Democratic Republic of
Congo, North Caucasus, North Asia, and Burma;
! increased to $20 million Emergency Migration and Refugee
Assistance for the Horn of Africa;
! provided $35 million for drought relief in West Africa and the Horn
of Africa;
! added $12 million for Hurricane Stan relief in Guatemala;
! rescinded $47 million in previously appropriated funds for economic
aid to Egypt in order to offset the increases for African drought and
Guatemala hurricane relief;
! added $40 million in economic aid for Haiti;
! added $100 million in Economic Support Funds for Jordan;
! added $13.2 million in Democracy Funds and peacekeeping in the
Democratic Republic of Congo, with a rescission of the same
amount from the Export-Import Bank; and
! provided $5 million for election support in the Democratic Republic
of Congo.

CRS-14
Table 5. International Amendments: Senate Action
Sponsor
Purpose/Congressional Record Page Reference
Vote
Lugar
Waived annuity limitations on reemployed Foreign Service
Agreed,
#3597
and Civil Service annuitants in order to fill positions in
voice vote
Iraq and Afghanistan (pp. S3792-S3793).
Leahy
Required notification to House and Senate Appropriations
Agreed,
#3661
Committees regarding the obligation of Democracy Fund
voice vote
money (p. S3793).
Leahy
Clarified report language reducing the amount of
Agreed,
#3663
Democracy Fund appropriations for Iran by $5 million to
voice vote
$34.8 million, and specifying $5 million of Democracy
Fund appropriations for election support in the Democratic
Republic of Congo (p. S3793).
Menendez
Increased by $60 million, to $129.8 million, funds for a
Agreed,
#3777
U.N. peacekeeping operation in Darfur; reduces by $60
voice vote
million funds for State Department mission operations in
Iraq (pp. S3939-S3940).
McConnell
Added a Presidential national security waiver authority
Agreed,
#3612
regarding restrictions on U.S. aid to the Palestinian
voice vote
Authority (p. S3940).
Biden
Provided not less than $250,000 of Diplomatic and
Agreed,
#3719
Consular Programs of the State Department be used to
voice vote
create an office of a special envoy for Sudan (p. S3940).
Leahy
Provided that $3.3 million of funds appropriated under the
Agreed,
#3823
International Narcotics Control and Law Enforcement
voice vote
account be used to support the demobilization process in
Colombia; has the effect of reducing funds requested for
Iraq (pp. S3940-3941).
Kennedy
Provided that of ESF appropriations for Iraq, $104.5
Agreed,
#3686
million should be available for broad-based democracy
voice vote
assistance through NGOs in Iraq (pp. S3945-3948).
Leahy
Provided $12 million for Hurricane Stan relief in
Agreed,
#3657
Guatemala and $35 million for drought relief in West
voice vote
Africa and the Horn of Africa; rescinds $47 million in
previously appropriated cash transfer aid for Egypt (pp.
S3963-3964).
Santorum
Added $25 million for Iran democracy programs (pp.
Ruled non-
#3640
S3937, 3969).
germane
Hurricane Recovery and Other Domestic Issues
Conference Agreement. H.R. 4939, as enacted, includes $19.3 billion for
hurricane recovery activities, $2.3 billion for pandemic influenza preparedness, $1.9

CRS-15
billion for border security, and $563 million for other disaster assistance and related
domestic activities. The conference agreement provisions include:
! $6.7 billion for the Department of Homeland Security — primarily
for Federal Emergency Management Agency activities — $3.2
billion below the initial request and $1.0 billion below the revised
request;
! $5.2 billion for the Community Development Block Grant at the
Department of Housing and Urban Development, $0.8 billion more
than requested;
! $3.7 billion for the Army Corps of Engineers for hurricane related
activities, $2.2 billion below the initial request and approximately
the same as the revised request;
! $2.3 billion for pandemic influenza preparedness, an amount
separately requested by the Administration as part of its regular
FY2007 budget request;
! $1.9 billion for border security, the same as the revised request;
! $542 million for the Small Business Administration Disaster Loan
program, $712 million less than requested; and
! $500 million for agricultural disaster assistance, for which no funds
were requested.
House Action. The House-passed measure provided $19.1 billion for
supplemental appropriations for relief and recovery from the 2005 Gulf Coast
hurricanes, a reduction of $0.7 billion from what was requested by the President. The
House bill agreed with much of the supplemental request, but made the following
changes:
! did not fund the request of $202 million for Tenant-Based Rental
Assistance at the Department of Housing and Urban Development
(HUD);
! reduced the request for Procurement at DOD by $250 million —
$887 million is provided;
! reduced DOD Military Construction by $270 million — $135.5
million is provided;
! reduced the Department of Veterans Affairs (VA) funds for
rebuilding the VA medical center in New Orleans by $50 million —
$550 million was provided and the obligation was made contingent
on enactment by June 30, 2006, of authority for rebuilding the
medical center. In addition, the VA was allowed to transfer up to
$275 million of these funds for unforeseen medical needs related to
the global war on terror;
! expanded the mechanism requested for the distribution of $4.2
billion for the Community Development Block Grant (CDBG) so
that it would not be limited to Louisiana projects; and
! added a provision to make available in FY2006 $750 million for the
Low-Income Home Energy Assistance Program (LIHEAP) that were
appropriated for FY2007 in the Deficit Reduction Act of 2005 (P.L.
109-171); these were contingency funds (allotted to one or more

CRS-16
states, at the Administration’s discretion, and based on emergency
need), and would remain available until the end of FY2007.
Table 6. Hurricane Recovery Amendments: House Action
Sponsor
Purpose/Congressional Record Page Reference
Vote
Millender-
Provides $20 million for Defense Health Programs to expand
Agreed,
McDonald
training capacity for prosthetics and orthotics (pp. H1013-
voice vote
H1014).
Jindal
Decreases funding for FEMA disaster relief by $2 million and
Agreed,
increases funding for Defense-wide procurement by the same
voice vote
amount (p. H1084).
Melancon
Increases funding for Flood Control and Coastal Emergencies by
Rejected,
$465 million (pp. H1033-H1034).
199-215
Jefferson
Increases Community Planning and Development by $2 billion
Rejected,
and decreases FEMA by the same amount (pp. H1034-H1035).
174-248
Sabo
Increases funding for the Customs and Border Protection (CBP),
Rejected,
the United States Coast Guard (USCG), FEMA administrative
208-210
and regional operations, and FEMA preparedness by $700
million, $125 million, $300 million, and $100 million,
respectively (pp. H1076-H1079, and H1094-H1095).
Neugebauer
Eliminates all funding in the bill for hurricane recovery
Rejected,
(pp. H1079-H1082, and H1095-H1096).
89-331
Millender-
Increases funding for election activities under FEMA by $20
Rejected,
McDonald
million (p. H1082-84, H1096).
194-227
Gingrey
Reduces funding for the National Historical Preservation Fund by
Rejected,
$3 million (p. H1086).
voice vote
Senate Action. On May 4, 2006, the Senate amended and approved its
version of the FY2006 supplemental appropriations, H.R. 4939. As passed, the
legislation provided a total of $28.8 billion for hurricane recovery, $9.0 billion (45%)
more than the President’s request, and roughly 51% more than the House provided
($19.1 billion). In addition, the bill provided $2.6 billion in funds for the prevention
and preparedness for pandemic influenza. The House did not fund these activities;
the President requested supplemental funds in November 2005. The Senate bill
provided a supplemental appropriation of $6.9 billion for other disaster assistance
unrelated to hurricane recovery or pandemic influenza; such assistance was not
requested by the Administration nor included in the House bill. The Senate bill
differed from the bill as passed by the House as follows. The Senate bill provided:
! $1.1 billion for mapping and debris removal to help Gulf Coast
fisheries affected by the hurricanes;
! $2.5 billion more for levee repairs and related (total of $4.0 billion)
for coastal and flood protection;

CRS-17
! $1.2 billion more for the Disaster Relief Fund and other a activities
administered by FEMA (total of $11.1 billion), with funds set aside
for the development of housing alternatives other than travel trailers;
! $881 million for education needs, including higher education loans
and grants;
! $1.5 billion for repairs to transportation infrastructure, public transit,
and grants for federal aid for highways;
! $1 billion more for CDBG (total of $5.2 billion) compared to both
the request and the House approved funding, with a set-aside for
low-income and assisted housing;
! $3.9 billion for emergency agricultural disaster assistance for crop
losses;
! $648 million for port security enhancement;
! $2.3 billion for pandemic influenza preparedness and response
activities;
! $1.9 billion for border security; and
! $430 million for veterans medical services.
Table 7. Hurricane Recovery and Other Domestic Amendments:
Senate Action on Selected Amendments
Sponsor
Purpose/Congressional Record page reference
Vote
Akaka
Provides an additional $430 million for Veterans Affairs
Agreed,
#3642, as
medical care (pp. S3560-S3564).
84-13
modified
by #3647
Gregg
Provides $1.9 billion for enhanced U.S. border security,
Agreed,
#3594
offset with a corresponding reduction in defense accounts
59-39
in titles I and II (p. S3532-S3543).
Reid
Provides $1.9 billion for enhanced U.S. border security,
Defeated,
#3604
without an offset (pp. S3532-S3544).
44-54
Ensign
Motion to recommit the bill with instructions that it be
Tabled,
reported back with a total net spending not exceeding
68-28
$94.5 billion (pp. S3562-S3563).
Coburn
Prohibits the availability of funds for the relocation of a
Tabled,
#3641,
CSX freight rail line further inland from the Gulf Coast
49-48
Division I
(pp. S3557-S3560; S3564-S3566).
Coburn
Prohibits the availability of funds for seafood promotion
Agreed,
#3641,
strategies (pp. S3569-S3573).
voice vote
Division II
Allard
Provides $27.6 million to repair Capitol complex utility
Agreed,
#3701
tunnels (pp. S3683-S3684).
voice vote

CRS-18
Sponsor
Purpose/Congressional Record page reference
Vote
Dodd
Provides $30 million for the Election Assistance
Agreed,
#3727
Commission for payments to states affected by 2005
voice vote
hurricanes (pp. S3870-S3872).
Domenici
Provides an additional $1.67 billion for levee rehabilitation
Agreed,
#3769
in New Orleans (p. S3859).
voice vote
Hutchison
Ensures that all localities incurring damage from Hurricane
Agreed,
#3789
Rita have the same cost-sharing requirements for federal
voice vote
aid (p. S3859).
Salazar
Provides an additional $30 million for National Forest
Agreed,
#3736
System projects (pp. S3878-S3879).
voice vote
Obama
Requires all contracts for hurricane relief exceeding
Agreed,
#3810
$500,000 be awarded using a competitive bidding process
98-0
(pp. S3879-S3880).
McCain
Strikes $6 million to sugarcane growers in Hawaii (pp.
Defeated,
#3617
S3858-S3863).
40-59
Cornyn
Establishes a floor to ensure that areas within States
Agreed,
#3699
adversely affected by 2005 hurricanes receive at least 3.5%
voice vote
of funds set aside for the Community Development Block
Grant program (pp. S3938-S3941).
Kennedy
Provides $289 million for compensation of individuals
Agreed,
#3688
harmed by pandemic influenza vaccine (pp. S3937, S3942-
53-46
43, S3948).
Inouye
Provides $1 million for assessing and monitoring waters in
Agreed,
#3601
Hawaii (pp. S3966-3968).
51-45
McCain
Strikes $74.5 million for agriculture assistance (pp. S3937,
Defeated,
#3616
S3953-3955, S3964).
37-61
Inouye
Adds $900,000 for assessments of reservoirs and dams in
Defeated,
#3673
Hawaii (pp. S3966-S3967).
43-53
Vitter
Provides an additional $200 million for flood prevention in
Agreed,
#3728
Louisiana, offset by a reduction in funds for FEMA (pp.
voice vote
S4007, S4011-S4013).
Thune
Provides $20 million for Veterans Affairs Medical
Defeated,
#3704
Facilities, with an offset (pp. S4007, S4013-4014, S4016).
39-59

CRS-19
Border Security: Administration and Senate
Proposals10
On May 18, 2006, the President amended the FY2006 supplemental request by
adding $1.948 billion11 for border security-related functions within the Departments
of Homeland Security (DHS) and Justice (DOJ). For the DHS, the request included:
! $805 million for Customs and Border Protection (CBP), portions of
which will support deployment of 1,000 additional Border Patrol
agents and 256 miles of vehicle barriers;
! $327 million for Immigration and Customs Enforcement (ICE) for
4,000 additional detention beds in support of the Administration’s
goal to end catch and release along the southern border;
! $25 million for the Federal Law Enforcement Training Center
(FLETC); and
! $15 million for the DHS Preparedness Directorate for border
security-related grants.
In addition, the revised request included $756 million in DOD funding for
deploying rotations of up to 6,000 National Guard personnel along the southern
border. Such personnel would be mobilized under Title 32 authorities to operate
surveillance systems, build patrol roads, fences, and vehicle barriers, and train
personnel, but would not perform law enforcement functions. Although personnel
would be under the control of individual governors, DOD would approve the use and
numbers of personnel. As proposed, these funds would be provided in the operation
and maintenance, defensewide account to be transferred to other accounts at DOD’s
discretion.12
According to Administration witnesses, these funds would provide up to 6,000
reserve personnel at any one time in the first year and 3,000 in the second year with
most of the personnel rotating in on two- to three-week assignments during their
annual training. Thus, up to 156,000 reservists could be mobilized for short periods
in the course of a year out of a 440,000 total in the Army National Guard. During a
10 This section was prepared by Jennifer Lake, Blas Nuñez-Neto, and Amy Belasco. For
a more detailed breakdown of the Homeland Security-related funding in the Supplemental
Appropriations Bills, please refer to CRS Report RL33428 Homeland Security Department:
FY2007 Appropriations, Jennifer Lake and Blas Nuñez-Neto, Coordinators.
11 The actual request for DHS and DOJ was for $1.974 billion; however $16 million within
the CBP Construction account and $10 million within the U.S. Attorney’s office were not
border security related. The adjusted request for border security was $1.948 billion.
12 Office of Management and Budget, Estimate No. 6, FY2006 Emergency
Supplemental(Border Security: Departments of Defense, Homeland Security, and Justice),
May 18, 2006; [http://www. w h itehouse.gov/ omb/budget/amendments/
supplemental_5_18_06.pdf].

CRS-20
recent hearing, a variety of concerns were raised — whether adequate personnel
would still be available for war and hurricane missions, the prerogatives of
governors, and the effectiveness of short-term mobilizations.13
Congressional Action. The Senate bill provided an amount similar to the
request, but it differed substantially in its scope. The Senate bill generally focused
on capital improvements within DHS, while the President’s request focused on
funding for CBP, ICE, and National Guard personnel deployments, and for other
resources on the border. The Senate bill included:
! $1.09 billion for CBP, portions of which will be used to replace air
assets and border patrol vehicles, to upgrade air operations facilities,
deploy sensor and surveillance technology, and for construction;
! $600 million for the Coast Guard aircraft and vessel acquisition,
construction, renovation and improvement;
! $80 million for ICE;
! $60 million to accelerate database integration and the conversion of
the United States Visitor & Immigrant Status Indicator Project (US-
VISIT) to a 10-print enrollment system;
! $50 million for the DHS Chief Information Officer to upgrade law
enforcement communications equipment;
! $18 million for the Federal Law Enforcement Training Center for
information technology improvements and a language training
center; and
! $2 million for the DHS Office of Policy to conduct a needs
assessment for comprehensive border security.
To offset the $1.948 billion cost of additional border security programs, the
Administration proposed reducing $1.948 billion in funding requested for Operation
Iraqi Freedom and Operation Enduring Freedom (Afghanistan and other global war
on terror operations). These funds would have come primarily from procurement.
Although the Administration did not identify cuts specifically by weapon systems,
some of the cuts appeared to come from those identified for reduction by the House
and Senate Appropriations Committees appropriators, while others would reject
congressional adds-ons (see sections below and Appendix A for details). The Senate
bill included an offset through an unspecified cut of $1.9 billion in DOD funds for
both war costs (Title I) and hurricane recovery (Title II). Under the Senate provision,
the Administration would have allocated the cut among programs in both titles.
The FY2006 conference agreement includes $1.9 billion for border security, the
same as the amount requested. The supplemental funds include: $805 million for
CBP; $327 million for ICE; $25 million for FLETC; and $15 million for grants.
These funds total $1.17 billion for DHS border security activities, as compared to the
$1.9 billion proposed by the Senate. The conference agreement includes the
President’s proposal to fund the deployment of up to 6,000 National Guard troops to
13 Senate Armed Services Committee, Transcript, Hearing on National guard Role in Border
Security, May 17, 2006; available on Reuters.

CRS-21
the border. However, this proposal is funded at $708 million, as opposed to the $756
million requested.
American Port Security and the Dubai Ports World
Operational Control of Six U.S. Terminals14
The takeover of terminal operations at six major U.S. ports by Dubai Ports
World (DP World), based in the United Arab Emirates (UAE), sparked intense
concerns among Members of Congress and the public, and reignited the debate over
what role foreign acquisitions play in U.S. national security, and specifically security
of American ports. DP World purchased the terminals from P&O Ports, a
multinational terminal operating company based in the United Kingdom which leases
marine terminals around the world, including terminals at six U.S. ports — New
York, New Jersey, Philadelphia, Baltimore, Miami, and New Orleans.
These ports are owned by a port authority, which is a public or quasi-public
organization associated with the city, county, or state government. The port authority
is responsible for the overall administration of the property, terminals, and other
facilities on the port complex. Marine terminals within these ports are areas with
equipment for loading and unloading ships and space for staging cargo until it is
loaded on the ship or transferred to overland modes of transport. P&O Ports is also
involved in other cargo handling services at other East and Gulf Coast ports, and a
cruiseship terminal in New York. DP World acquired P&O’s terminal leases or
concessions at these ports, which account for a portion of the total cargo handling or
cruise ship activity that takes place at these ports. DP World currently operates 19
container terminals outside the United States and is involved in other cargo handling
services in 14 countries. DP World operates as a commercial entity but is owned by
the Government of Dubai in the UAE.
In addition to issues related to the review process for foreign investment in the
United States and U.S. foreign policy with regard to the UAE, a key issue for
Congress as it evaluated this transaction was what role marine terminal operators
have in the security of U.S. ports. While the federal government, namely the Coast
Guard and Customs and Border Protection (CBP), takes the lead in port security,
security responsibilities are also shared with the port authorities, local law
enforcement, vessel owners, terminal operators, and port workers. Coast Guard
regulations and CBP security programs require terminal operators to provide basic
security infrastructure and follow certain security practices when handling cargo.
While the United States actively promotes internationally the policy of relaxing
rules concerning foreign investment, including the national treatment of foreign
firms, some in Congress and others question some aspects of this policy as it relates
to allowing foreign competitors unlimited access to the Nation’s industrial base.
Much of this debate focuses on the activities of a relatively obscure committee, the
14 Prepared by John Frittelli, Analyst in Transportation, and James Jackson, Specialist in
International Trade and Finance.

CRS-22
Committee on Foreign Investment in the United States (CFIUS) and the Exon-Florio
provision (added to the Defense Production Act in 1988; P.L. 100-418), which gives
the President broad powers to block certain types of foreign investment.15
The proposed acquisition of port terminals operated by DP World sparked a
firestorm of activity in the 2nd Session of the 109th Congress. H.J.Res. 79 and
S.J.Res. 32 express Congressional disapproval of the proposed acquisition and direct
CFIUS to conduct a full 45-day review of the transaction and to brief Members of
Congress on the results of the investigation. Numerous other bills related to the issue
were also introduced. The matter was inserted into the FY2006 Supplemental
Appropriation during a House markup of the legislation on March 8.
In the face of mounting pressure from Capitol Hill and elsewhere, DP World
announced on March 9 that it would not manage the American ports itself, but
transfer operations to a U.S. “entity.” Subsequently, on March 15 DP World said it
would sell the U.S. port facility operations to an American buyer, a process that
might take four to six months. In the meantime, the UAE-based company said that
P&O Ports North America would be operated separately by a U.S. subsidiary.
Congressional Action
During the March 8 markup on the $92 billion emergency FY2006 emergency
supplemental, House Appropriations Committee Chairman Lewis submitted an
amendment aimed at blocking the acquisition by DP World of the six American port
terminals. The amendment, which passed 62-2, barred the use of any appropriated
funds to take action allowing the purchase by DP World, notwithstanding any “prior
action or decision by or on behalf of the President.” President Bush previously had
said that he would veto any legislation containing such text.
Following the March 9 announcement by DP World that it would turn over port
operations to an American entity, Chairman Lewis said in a press release issued on
March 10, that “reports that Dubai Ports World has agreed to sell its holdings of a
subsidiary involved in managing six American ports is encouraging news.”16
Nevertheless, the Lewis amendment remained in the House-passed version of H.R.
4939. The House defeated (38-377) an amendment offered by Representative
Gilchrest on March 15 that would have struck the text banning DP World purchase.
The Senate bill did not include language similar to the House regarding Dubai
Ports World. However, a Byrd amendment accepted by the Senate Appropriations
Committee added $648 million for port security grants, radiation portal monitors, and
for activities of the Coast Guard, Customs and Border Protection Service.
15 For more information, see CRS Report RL33312, The Exon-Florio National Security Test
for Foreign Investment, by James Jackson.
16 Chairman Lewis Makes a Statement on DP-World Development, March 10, 2006.
Available at House Appropriations Committee website: [http://appropriations.house.gov/
index.cfm?FuseAction=Home.Home]

CRS-23
The conference agreement on H.R. 4939 deletes the House provision.
Conferees noted that the DP World decision to transfer operations to a U.S. entity
makes the House-passed text unnecessary. The enacted bill further drops the Senate-
passed title providing $648 million for port security funding.
Defense Supplemental17
To cover war costs, the FY2006 revised supplemental requested $65.9 billion
for the Department of Defense (DOD) war-related costs, an amount that was in
addition to the $50 billion that DOD already received in the FY2006 bridge fund
included in DOD’s FY2006 Appropriations Act (P.L.109-148).18 If enacted, this
would have brought DOD’s total for Iraq (Operation Iraqi Freedom or OIF) and
Afghanistan/other global war on terrorism activities (Operation Enduring Freedom
or OEF) to $115.8 billion in FY2006.
If passed as revised, DOD’s funding in FY2006 would have been $17 billion
more than the $99 billion received in FY2005 and $49 billion more than the $67
billion received in FY2004 (Table 8).19 Based on this request, DOD’s war and
occupation costs would have increased from $67 billion in FY2004 to $116 billion
in FY2006 — an increase of 72% in two years.
In FY2003, the year of the invasion of Iraq, the Defense Department’s war costs
totaled between $69 billion and $76.2 billion depending on whether $7.1 billion in
funds provided in DOD’s FY2003 regular appropriations are included.20
17 Prepared by Amy Belasco, Specialist in National Defense. Military construction section
prepared by Daniel Else, Specialist in National Defense.
18 In FY2005 and FY2006, Congress included “additional appropriations” for war costs in
Title IX of DOD’s regular appropriations act to ensure that DOD would have sufficient
funds to cover war costs until a supplemental was passed.
19 The $99 billion total for FY2005 includes $75.9 billion in the FY2005 Supplemental (P.L.
109-13) and $23.1 billion of the $25 billion appropriated to DOD in the FY2005 bridge
supplemental (Title IX, P.L. 108-287). Congress provided that the FY2005 bridge funds
were available upon enactment and DOD obligated $1.9 billion in FY2004, leaving $23.9
billion available for FY2005.
20 See CRS Report RL33110, The Cost of Iraq, Afghanistan and Enhanced Security Since
9/11, by Amy Belasco.

CRS-24
Table 8. Defense Department War and Occupation
Appropriations, FY2004-FY2006
($s — billions)
FY2004
FY2005
FY2006 Bridge:
FY2006
FY2006
Department of P.L.108-106;
P.L.108-287;
P.L.108-148
Revised
Total with
Defense
P.L.108-287a
P.L.109-13b
Supp.
Supp.
Total
$66.8
$98.8
$50.0
$65.9
$115.8
Annual Change
NA
$32.0
NA
NA
$17.0
$ Change Since
NA
$32.0
NA
NA
$49.0
FY2004
% Change
NA
48%
NA
NA
73%
Since FY2004
Source: CRS calculations based on public laws.
a. Total for P.L. 108-106 excludes $3.5 billion rescission of FY2003 funds; includes $1.9 billion of
funds in the FY2004/FY2005 bridge fund that was obligated in FY2004 (Title IX, P.L. 108-
287).
b. Total for FY2005 includes funds available for FY2005 from the FY2004/FY2005 bridge fund and
funds appropriated in the FY2005 supplemental (P.L. 109-13) excluding funds for Tsunami
relief and the Office of the Director of National Intelligence.
According to DOD’s justification materials, the FY2006 supplemental request
assumed that monthly deployment levels would average about 138,000 troops in Iraq
and 18,000 troops in Afghanistan, with temporary fluctuations during troop rotations.
DOD did not provide a breakdown of how the revised $65.9 billion request would
be allocated between Iraq and Afghanistan. DOD’s justification materials stated that
monthly military personnel and operation and maintenance costs — the expenditures
most closely tied to military operations — averaged $4.5 billion in Iraq and $0.8
billion in Afghanistan and other global war on terrorism activities, or a total of $5.3
billion monthly for both operations in FY2005.21
If one defines “military operations costs” as the cost of military personnel and
operation and maintenance and applies this approach to the enacted bridge fund and
DOD’s new supplemental FY2006 request, average military operations costs per
month would increase from $5.6 billion in FY2005 to $6.8 billion per month in
FY2006, a 21% increase (see Table 9). These average monthly costs include only
those costs that would be obligated in FY2006 but not all of DOD war and
occupation costs that are associated with operations. For example, this definition of
“military operations costs” does not include additional funds spent for national
intelligence (cost not tracked by DOD) or training of Afghan and Iraq security forces,
21 Department of Defense, FY 2006 Supplemental Request For Operation Iraqi Freedom
(OIF) and Operation Enduring Freedom (OEF), February 2006; [http://www.dod.mil/
comptroller/defbudget/fy2007/FY06_GWOT_Supplemental_Request_-_FINAL.pdf], p. 3
(hereinafter cited as DOD, FY2006 Supplemental Request - war).

CRS-25
now a substantial expense. Nor do military operations costs — as defined by DOD
— include DOD’s substantial investment costs for additional equipment for
deployed forces that DOD believes needs to be ordered in FY2006 to meet its
military needs.22
If all these costs are included, full monthly war and occupation costs would have
averaged $8.2 billion in FY2005, and would have increased to $9.7 billion in FY2006
if DOD’s request were enacted. Table 9 shows the average monthly increases for
each of these categories, which range from decreases for military personnel and
Afghan and Iraq training funds to increases in O&M and investments.
Potential Issues in DOD’s FY2006 Supplemental Request
In its revised FY2006 supplemental request, the Department of Defense
requested $65.9 billion to provide special pays for military personnel, activate
reserves, support military operations, repair equipment, house and provide for troops,
buy additional military equipment, conduct research and development, construct
military facilities, train Afghan and Iraqi security forces, and reimburse coalition
allies, a reduction of $1.9 billion from the original request.23 Table 10 lists the
major elements of the new request by title, the amount in the FY2006 bridge fund
(Title IX, P.L.109-148) and the total for FY2006 as requested and approved to date.
For a breakdown by appropriation account, see table appended to this report.
22 DOD requests that its procurement funds be available for three years to take into account
the one to three years that it takes to contract, order, produce and receive military parts and
equipment.
23 See Office of Management and Budget (OMB), Estimate No. 6, May Office of
Management and Budget, Estimate No. 3, OMB, FY2006 Supplemental Request, Estimate
No. 3, FY2006 Emergency Appropriations (various agencies), Ongoing Military, Diplomatic
and Intelligence Operations in the Global War on Terror, Stabilization and
Counterinsurgency Activities in Iraq and Afghanistan, and Other Humanitarian Assistance,
2 - 1 6 - 0 6 ; [ h t t p : / / w w w . w h i t e h o u s e . g o v / o m b / b u d g e t / a m e n d m e n t s /
supplemental2_2_16_06.pdf]; (Hereafter cited as OMB, FY2006 Supplemental War
Request.) DOD, FY2006 Supplemental Request - war.

CRS-26
Table 9. Average Monthly DOD Budget Authority for War and
Occupation, FY2005 Enacted-Revised FY2006 Request
($s — billions)
FY2006:
Bridge
FY2006 +/- FY2005
FY2005:
&Revised
Title
Bridge & Suppa Supp Requestb
$s
%
Military Personnel
$18.4
$15.8
($2.6)
-14%
Operation & Maintenance(O&M)
$46.0
$61.3
$15.3
33%
Other supportc
$2.9
$4.2
$1.2
42%
Military Operations Total
$67.3
$81.3
$13.9
21%
Monthly Average: Military
$5.6
$6.8
$1.2
21%
Operations (BA)
Other Defense programsd
$3.9
$5.0
$1.0
26%
Afghan and Iraq Training Forces
$7.0
$5.9
($1.1)
-16%
Fund
Intelligencee
[5.1]e
[5.6]
[.5]e
[10%]e
Investment
$20.5
$23.8
$3.3
16%
Total Costs
$98.9
$115.8
$16.9
17%
Monthly Average,Total Budget
$8.2
$9.7
$1.5
18%
Authority
Sources: CRS calculations based on public laws, conference reports, DOD, FY2006 Supplemental
Justification Materials, February 2006.
Note: Totals may not add because of rounding.
a. Includes remaining funds in FY2005 bridge (P.L. 108-287) and FY2005 Supplemental (P.L. 109-
13) excluding funds for Tsunami relief and office of the Director of National Intelligence.
b. Includes $50 billion in P.L. 109-148, FY2006 DOD Appropriations Act and $67.9 billion in
FY2006 supplemental request (OMB Estimate No. 6, May 16, 2006; and revised OMB Estimate
No. 3, original request.
c. “Other support” includes defense health and working capital funds.
d. “Other Defense programs” include Iraq Freedom Fund, the Office of Inspector General, and Drug
Interdiction and Counterdrug.
e. Funding of $1.8 billion for intelligence was included in the Iraq Freedom Fund in P.L.108-287, and
$3.3 billion in P.L. 109-13 for a total of $5.1 billion for FY2005. Funding of $3 billion was
included in the Iraq Freedom Fund in the FY2006 bridge (P.L. 109-148), and the FY2006
request includes an additional $2.6 billion for a total of $5.6 billion; see DOD, FY2006
Justification - War, Feb. 2006, p. 1.
Several issues about the FY2006 supplemental request arose in Congress,
including whether DOD’s funding requests for training Afghan and Iraqi security
forces were necessary in light of the pace of implementation, how to make
transparent the DOD assumptions about military personnel levels for active-duty and
reserve forces that underlie the request, whether DOD could better contain increases
in operating costs, and whether DOD’s investment request finances peacetime as well
as wartime needs.

CRS-27
Table 10. Department of Defense FY2006 War-Related Bridge
Supplemental and FY2006 War-Related Supplemental Request
($s — billions)
FY2006 FY2006
Enacted
Supp.
FY2006
plus
Revised House
Senate
Supp.
Title
Enacted Request Request Supp.
Supp.
Conf.
Iraq Freedom Fundb
$4.66
$4.76
$0.10
$0.00
$0.03
$0.00
Afghanistan Security Forces Fund
$0.00
$2.20
$2.20
$1.85
$1.91
$1.91
Iraq Security Forces Fund
$0.00
$3.70
$3.70
$3.01
$3.70
$3.01
Joint Improvised Explosive Defeatc
$0.00
$0.00
$0.00
$0.00
$1.95
$1.96
Military Personnel
$6.21
$15.80
$9.59
$9.93
$10.20
$10.28
Operation and Maintenance d
$28.56
$61.29
$32.71
$32.11
$31.60
$31.03
Procurement
$7.98
$24.38
$14.60
$17.68
$15.46
$14.91
Research, Development, Test & Eval
$0.05
$0.83
$0.74
$1.00
$0.71
$0.71
Military Construction
$0.00
$0.49
$0.37
$0.32
$0.28
$0.24
Revolving & Management Funds
$2.52
$3.03
$0.52
$0.50
$0.52
$0.52
Other Defense e
$0.03
$1.38
$1.35
$1.32
$1.31
$1.31
Total
$50.00
$117.87
$65.87
$67.72 $67.67 f
$65.86
General Provision reducing DOD
war & hurricane funds e
-.-
-.-
-.-
-.-
($1.90)f
a. Reflects $1.948 billion reduction proposed by the Administration on May 18, 2006 (OMB Estimate No. 6).
b. Iraq Freedom Fund includes $3 billion for intelligence in the FY2006 bridge fund (Title IX, P.L.109-148),
and $100 million in the FY2006 request for two-year money for commanders’ “near-term urgent
operational needs;” see OMB, Estimate No. 3, 2-16-06; also includes $100 million for the Coast Guard.
c. Request and House bill included $1.958 billion in three separate accounts.
d. Excludes Afghan and Iraq Security Forces Fund.
e. “Other” includes Defense Health, Drug Interdiction and the Office of the Inspector General. Department
of Defense, FY 2006 Supplemental Request For Operation Iraqi Freedom (OIF) and Operation
E n d u r i n g F r e e d o m (O E F ), February 2006; [http://www.dod.mil/ c o mp t r o l l e r /
defbudget/fy2007/FY06_GWOT_Supplemental_Request_-_FINAL.pdf].
f. The Senate adopted an amendment providing $1.9 billion for border security, to be offset by an unspecified
cut of $1.9 billion in DOD funds for both war costs (title I) and hurricane rehabilitation (title II). The
Administration would determine the distribution of the cut among programs in both titles. Consequently,
the $67.67 billion Senate total for war costs could have fallen somewhere in the range of $65.77 billion
and $67.67 billion, depending on how the reductions would be allocated.
Afghan and Iraq Security Forces Funds: Obligations Slower Than
Anticipated. In its FY2006 supplemental, DOD requested $2.2 billion for the
Afghan Security Forces Fund and $3.7 billion for the Iraq Security Forces Fund to
train and equip Afghan and Iraqi security forces. These funds were in addition to
$500 million that DOD could use in the FY2006 bridge for either country.24
24 Section 9005, P.L. 109-148 sets a ceiling of $500 million from funds within Title IX.

CRS-28
Altogether, DOD would have had available $6.4 billion in FY2006 and FY2007 for
training and equipping, in addition to funds already appropriated.25
For Iraqi security forces, the request included:
! $787 million to equip Iraq’s brigades by purchasing aircraft, patrol
boats, equipment, and ammunition, $751 million for basing and
infrastructure;
! $712 million for police equipment, $696 million for basing, $250
million for training, $296 million to maintain buildings; and $65
million for other police needs; and
! $73 million to train and equip Iraqi security guards for detainee
operations or contract for those services.
For Afghan security forces, the request included:
! $585 million for police training, $346 million for police
infrastructure, $235 million to maintain equipment and pay police
salaries and $195 million for equipment;
! $225 million to operate and support Afghan military forces, $221
million for military equipment, $138 million for training, and $240
million for military infrastructure; and
! $14 million for detainee operations.
Although training and equipping Afghan and Iraqi security forces is clearly a
high priority for the Administration, it appears that DOD is obligating these funds
more slowly than originally anticipated so that funding requested for FY2006 could
be greater than currently required. The $5.9 billion requested in the FY2006 bridge
supplemental would be in addition to the $7 billion — $1.3 billion for Afghanistan
and $5.7 billion for Iraqi security forces — already received by DOD in FY2005, and
the $6.9 billion previously provided in the FY2004 supplemental.
As of January 2006, about $235 million of the $5 billion provided for training
Iraqi forces in the FY2004 supplemental was unobligated or still available to be
spent;26 obligations data for Afghanistan are not available. Of the $5.7 billion
appropriated for Iraq in FY2005, about $2.1 billion or about 37% is obligated as of
January 1, 2006. In its plan for FY2005, DOD had projected obligations of $4.3
billion or about 75% at that point. In the case of Afghanistan, DOD has obligated
about $733 million or 33% of the $1.3 billion appropriated as of January 1, 2006.
This is also below the $825 million or 64% anticipated by DOD last year.27
25 As in previous proposals, the monies are requested to be available for two years or until
September 30, 2007.
26 State Department, Section 2207 Reports, Iraq Relief and Reconstruction Funds (IRRF) -
Status of Funds, obligations as of December 28, 2005.
27 See entries for these accounts in Standard Form (SF)133, Report on Budget Execution and
Budgetary Resources, October 2005 and FY2006, 1/30/06 for 1st quarter FY2006.
[http://www.whitehouse.gov/omb/reports/sf133/FY_2005_SF_133s_w_Revis.pdf]. For
(continued...)

CRS-29
Potential Training Funding Issues. With the current rate of spending,
some observers questioned whether the full $5.9 billion requested to train and equip
Afghan and Iraqi forces was needed at this time. Last year, DOD anticipated that
training funds appropriated in FY2004 would run out in June 2005 for Iraq and in
October 2005; some $235 million remains available. Obligations of FY2005
appropriations are also below those anticipated for FY2005 monies, particularly for
Iraq. On the other hand, the FY2006 supplemental requested funds that would be
available for two years and so could also be used in both FY2006 and FY2007.
Another potential issue was whether Congress might want advance notification
of DOD’s overall plans for the types of equipment to be provided to Afghan and Iraqi
security forces. While the current and proposed statutory language requires DOD to
provide five-day advance notification of individual transfers from the account, this
does not give Congress an overall sense of DOD plans for the amounts and types of
equipment to be provided. Nor is it clear whether DOD plans to transfer or leave
behind any U.S. equipment and how that would factor into such plans.
Congressional Action. The conference agreement endorses the $1.9 billion
in Afghan training funds recommended by both houses, $300 million below DOD’s
request, suggesting that the funds could not be spent in FY2006. For Iraq, the
conference measure provides $3 billion, $700 million below the request. Conferees
did not specify where the funds would be cut, and permit DOD to use funds for
infrastructure facilities for both military and security forces, dropping restrictions
proposed by the House. Conferees also endorse House-proposed reporting
requirements and call on the Administration to seek funds from neighboring
countries for Iraq’s security forces.28
In prior action, the House measure provided $1.9 billion to Afghan security
forces and $3 billion for Iraqi Security forces in specially segregated funds to cover
the cost to train, equip, and build facilities for military and police forces. Pending
submission of complete justification materials, the House Appropriations Committee
cut funds intended to build facilities for Afghan ($396 million) and Iraqi police forces
($696 million). The Committee also put a hold on another $991 million slated for
military infrastructure until DOD submits a detailed, project-by-project financial
plan.
The Senate-passed measure provided $1.91 billion to train Afghan security
forces — close to the House level and $3.7 billion for Iraq security training — $700
million more than the House and the same as the request. During Committee
markup, the Senate panel added language that places a hold on funds to repair and
construct Iraqi security infrastructure until formation of a unified government.29 In
its April 25, 2006 statement of administration policy, the Administration specifically
27 (...continued)
DOD plan, see DOD, “Iraq/Afghanistan Security Forces: DOD’s FY05 Supplemental
Request,” March 2005.
28 Congressional Record, June 8, 2006, p. H. 3608.
29 S.Rept. 109-230, p. 21-22.

CRS-30
objected to the reduction in funds for Afghan security forces as reported by the
Senate Committee on Appropriations.
Coalition Support. As in previous years, DOD requested funds to make
payments to “key cooperating nations” that provide logistical and military support for
operations in Iraq and Afghanistan. In the FY2006 supplemental, DOD requested
$1.5 billion for coalition support and $550 million for “lift and sustain funds” — to
assist Iraq and Afghanistan and other nearby friendly nations in their efforts to
combat terrorism — in addition to the $195 million in coalition support bridge funds.
This would bring the total to $2.2 billion for support of coalition partners.
In FY2005, DOD received $1.2 billion for coalition support. DOD did not
provide a rationale for the increased funding for coalition support requested. If
history is a guide, much of the funds will go to Pakistan, with the remainder to
Jordan, Afghanistan, Ukraine, Poland, and other coalition allies.30
Congressional Action. The conference agreement cuts in half DOD’s
request for coalition support for U.S. allies participating in the war on terror from
$1.5 billion to $740 million, as recommended by the Senate. The House measure had
provided $1.2 billion. In its April 25, 2006 statement of administration policy, the
Administration specifically objected to the Senate-proposed cuts for coalition
support.
Commander’s Emergency Response Program (CERP). DOD also
requested $423 million for the Commander’s Emergency Response Program (CERP),
a program where military commanders can fund local projects for humanitarian relief
and reconstruction. The FY2005 Supplemental set an upward limit of $854 million
in FY2005, $500 million above DOD’s request.31
Congressional Action. The conference agreement approves DOD’s request
for a ceiling of $423 million on CERP programs, as recommended in both House and
Senate bills. The House Appropriations Committee, however, cited concerns about
a change in the program’s focus.
Iraq Freedom Fund. Conferees rejected DOD’s request for $100 million in
the Iraq Freedom Fund for unspecified purposes, as had been recommended by the
House. The Senate bill provided $25 million.

New Joint Improvised Explosive Device Defeat Fund. The Senate bill
set up a new transfer account that would allow the Director of the Joint Improvised
Explosive Device Defeat Organization to “investigate, develop and provide
equipment, supplies, services, training, facilities, personnel and funds to assist U.S.
forces in the defeat of improvised explosive devices,” (IEDs). DOD would report to
30 Office of the Secretary of Defense, Coalition Support Fund Tracker, FY2002-FY2005,
February 2006.
31 See Section 1006, P.L. 109-13, which raised the limit set in the FY2005 National Defense
Authorization Act (P.L. 108-375).

CRS-31
the congressional defense committees within 60 days of enactment on its plans.32
The $1.958 billion allocated to this new account was drawn from $490 million in
O&M, Army, $1.1billion in Other Procurement, Army and $357 million in RDT&E
Army included in DOD’s request. The House approved the monies in DOD’s request
for countering IEDs but left the funds in the three separate accounts.
Military Personnel Request and Visibility of Personnel Plans. The
Defense Department requested $9.6 billion for military personnel in the FY2006
supplemental, which would bring total funding for the year — including the bridge
supplemental — to $15.8 billion. This is $2.9 billion less than received by DOD for
FY2005.33 It was not clear why the level would be almost $3 billion lower this year.
Additional War-related Military Personnel Benefits. In the FY2006
supplemental request, $3.2 billion was slated to pay for additional war-related
military personnel benefits including:
! $1.4 billion for special pays for active-duty forces including hostile
fire pay, family separation allowances, hardship duty;34
! $341 million for additional recruiting and retention bonuses to
sustain wartime forces levels;
! $59 million for higher foreign language proficiency pay;
! $544 million for death gratuities;
! $400 million for additional life insurance claims above peacetime
levels;35
! $474 million for catch-up benefits for service members who suffered
traumatic injuries who would qualify under the new benefit enacted
in the FY2006 National Defense Authorization Act;36 and
! $22 million for insurance premiums for OIF/OEF personnel.
With the $800 million already received in the FY2006 bridge fund, the total for war-
related special pay and benefits in FY2006 would be about $4 billion.37 Since the
launch of military operations in Iraq, Congress has raised and added war-related
personnel benefits and may again consider whether these benefits are sufficient.
32 See Congressional Record, June 8, 2006, p. H3588, and H.R. 4939 as marked up by the
Senate, p. 101-102.
33 DOD’s reported war-related obligations for military personnel are $15.9 billion according
to the September 30, 2005 report of the Defense Finance Accounting Service (DFAS),
Supplemental & Cost of War Execution Report. These reports, however, appear not to
capture about $2.95 billion in military personnel obligations as recorded by the SF-133, the
government’s standard financial reporting system.
34 Congress has authorized monthly levels of $225 for imminent danger pay, $250 for family
separation allowance and $100 for hardship duty location pay for those deployed less than
12 months and $300 for those deployed more than 12 months.
35 Payments go to the Department of Veterans Affairs to pay claims.
36 Payments go to the Department of Veterans Affairs to pay claims.
37 CRS calculations based on H.Rept. 109-359, p. 471.

CRS-32
Sustaining Force Levels. The FY2006 supplemental request included $6.2
billion to sustain current force levels, including $653 million to support active-duty
force levels above normal peacetime levels, known as “overstrength,” and about $5.5
billion to pay activated reservists.38 In DOD’s plan, Army troop levels would be
16,300 above and Marine Corps levels would be 6,000 above peacetime strength
levels in FY2006. DOD has already received $420 million to cover overstrength
costs, which would bring the total base for the Army and 175,000 for the Marine
Corps.
DOD’s FY2006 request also included $5.5 billion to pay activated national
guard and reserve forces, in addition to $4.6 billion included in the FY2006 bridge
fund for “incremental” war costs for military personnel. That would bring the total
to about $10.1 billion, or about $1.5 billion less than requested in FY2006.39 DOD’s
wartime financial reporting system reports $8.4 billion to activate reserve forces in
FY2005 but this figure appears to be understated.40
DOD’s FY2006 supplemental justification did not include any information
about the mix of active-duty and reserve forces anticipated in FY2006 that would be
funded with these monies. And because of the discrepancies in the figures, it is
impossible to say whether DOD’s estimated funding in FY2006 is similar to or
different from last year. In general, the more that DOD relies on reservists, the
higher are war-related military personnel costs. That is because DOD’s incremental
war costs for active-duty forces include only special pays because their regular pay
is included in DOD’s regular appropriations whereas the additional full-time pay for
activated reservists is a wartime expense.
According to a DOD data base, about 36% of the 270,00 forces deployed in
support of the global war on terror were activated reservists and about 64% were
active-duty in FY2005, figures similar to those cited by DOD spokesperson.41
According to DOD, the FY2006 funding request supported overall force levels in
FY2006 that were similar to those in FY2005 — about 138,000 in Iraq and 18,000
in Afghanistan. These figures did not appear to include other forces in the region or
elsewhere supporting the global war on terrorism.
In light of concerns about stress and sustaining both active-duty and reserve
forces, some observers wanted to know the DOD planning assumptions for the
FY2006 supplemental request for military personnel, including not only personnel
38 This includes some $933 million for basic allowance for housing for dependents of
activated reservists.
39 See H.Rept. 109-359, p. 471.
40 DFAS, Supplemental & Cost of War Execution Report, September 2005; the FY2007
budget shows almost all military personnel funds as obligated; see OMB, FY2007 Budget
Appendix at [http://www.whitehouse.gov/omb/budget/fy2007/pdf/appendix/mil.pdf]. CRS
compared appropriated levels to those reported in DFAS reports and those reported in the
FY2007 budget to identify a discrepancy of about $3 billion.
41 CRS calculations based on Defense Manpower Data Center, Contingency Tracking
System, Deployed Military Personel by Country and Component, November 2005 run.

CRS-33
in-country but all those paid for by bridge and supplemental funds. That information
was not provided in DOD’s justification material.
Congressional Action. The conference agreement adds $560 million to the
Navy Military Personnel account. Of that amount, about $200 million increases
recruiting and retention incentives by two-thirds above the request. Another $300
million restores monies cut from the regular budget in a government-wide 1% across-
the-board cut levied to offset additional Gulf Hurricane monies.42 Restoring that cut
would fund peacetime military personnel expenses even though the funds are being
included in the war supplemental. The increase also adds a Senate-proposed
provision of $49 million for higher death benefits, which the bill makes available to
service members who died between May 12, 2005, and August 1, 2005.
In earlier action, the Senate bill also included $300 million to restore funds cut
for regular expenses of Military Personnel, Navy by the 1% cut. In addition, the
Senate added $195 million to the $305 million request for recruiting and retention
incentives that is included in the services’ military personnel accounts. Most of the
funds went to the Army. (An additional $85 million for recruiting and retention was
in the O&M accounts.)
Operation and Maintenance Funding Rises Substantially in FY2006.
The Defense Department requested $32.7 billion in Operation and Maintenance
(O&M) funds in the FY2006 supplemental. These funds would be in addition to the
$28.6 billion received in the FY2006 bridge fund, and would bring total funding in
FY2006 to $61.3 billion. That amount is $15.5 billion or about one-third higher than
the $45.8 billion appropriated in FY2005.
O&M funding pays for activities and services ranging from personnel support
for troops (e.g., subsistence, body armor, morale, welfare and recreation activities)
to the cost of operating forces and billeting troops. Major elements in the $32.7
billion FY2006 supplemental — all in addition to FY2006 Title IX bridge funds —
included:
! $12 billion for operating support (fuel, spare parts, and related
expenses);
! $1.9 billion in personnel support (e.g., subsistence, body armor and
other protective gear);
! $2.4 billion for billeting of soldiers, base camp facilities, staging
areas, airfields;
! $500 million for command, control, communications and tactical
intelligence;
! $9.5 billion for transportation personnel and equipment both to and
within the theater;
! $3.2 billion for equipment maintenance in-theater and depot
maintenance at home; and
42 See Congressional Record, June 8, p. H. 3606. Sec. 3801, Title, III, Chapter 8, P.L.109-
148 requires a 1% across-the-board cut government-wide except for the VA and emergency
appropriations.

CRS-34
! $2.8 billion in other unspecified support costs.
It is difficult to explain the increases in FY2006 because DOD did not show the
funding already received in the bridge supplemental in its justification materials.
Since DOD did not request the bridge funds — though it did not oppose them —
there was no formal request or justification material. It appears that about half of the
$15.3 billion increase in FY2006 for O&M could be explained by higher
transportation, maintenance, and fuel costs.
Depot Maintenance and Transportation Slated for Large Increases.
If the FY2006 request was approved as proposed, DOD’s total depot maintenance bill
for FY2006 would be $7.3 billion — about $2.1 billion, or almost 40% higher than
the FY2005 level.43 According to DOD’s justification material, the additional depot
maintenance requirements reflected the harsh desert environment and wartime
conditions, which have increased the wear and tear on equipment.
Another area programmed for large increases was transportation of personnel
and equipment to and within theater for which DOD is requesting $9.5 billion.
Including FY2006 bridge funds would bring the FY2006 total to $10.8 billion, or
about $4 billion, or almost 60% higher than the $6.8 billion in FY2005. DOD
attributed about $1.8 billion of the increase to higher fuel costs in FY2006.
Excluding those costs, the total would still be almost one-third higher than the
previous year.
DOD did not provide a breakdown between its use of more expensive airlift vs.
sealift to transport goods but noted that the “Department is working to reduce the
proportion of air transport used and to lower the costs ... but ... will continue to need
air transport for the most critical items and shipment,” a commitment also included
in DOD’s justification material for FY2005.44 It is not clear why in the fourth year
of operations, DOD is still heavily relying on air transport of supplies.
Higher fuel prices may also account for increases in operating tempo costs that
include fuel, spare parts, and other costs of deployed units. DOD’s request is
predicated on the assumption that the average price of fuel — with service charges
— rises from $62 to $84 per barrel.45 DOD estimates that higher fuel costs in
FY2006 account for $2.6 billion in higher costs, including $2.2 billion financed in
the bridge fund and $423 million in the new supplemental.46
The FY2006 O&M supplemental also included $539 million for body armor
plus an additional $140 million in the bridge supplemental for a total of $680 million.
43 DOD obligated $5.2 billion for depot costs in FY2005; see DFAS, Supplemental & Cost
of War Execution Report, September 2005.
44 DOD, FY2006 Supplemental Request — war, p. 10.
45 Ibid., p. 12
46 Ibid., pp. 10, 12.

CRS-35
This appeared to be comparable to the $650 million appropriated for body armor in
FY2005.47
These three areas — equipment maintenance, transportation, and higher fuel
costs would account for about $8.7 billion, or roughly half of the $15 billion increase
in O&M in FY2006. From DOD’s justification material, the source or rationale for
other funding increases or for continuation of FY2005 levels for other areas was not
apparent.
Congressional Action. The $31.6 billion in funding proposed in the
conference agreement for O&M is $1.7 billion below the request and close to the
Senate level. The cuts include $500 million to O&M, Air Force, presumably
reflecting the House difference about the likely cost of fuel; a $750 million cut to
coalition support which halves the Administration’s request; and a transfer of funds
to counter IEDs from O&M to the new centralized account. Conferees also endorse
the House’s call for a report on the long-term cost to repair Army equipment due by
July 7, 2006.
In earlier action, the House-passed measure cut a total of $630 million from
DOD’s $32.7 billion O&M request, decreasing funds for higher fuel prices (-$759
million), coalition support (-$300 million), and “lift and sustain” aid to U.S. allies
(-$104 million). These cuts were partly offset by increases for depot maintenance of
upgraded M1A1 tanks for Army National Guard units ($130 million) and for Marine
Corps repair/reset ($100 million).
The Senate-passed bill reduced by $1.1 billion DOD’s O&M request — almost
twice the amount cut by the House. Like the House, most of the cuts were for higher
fuel prices (-$813 million), coalition support (-$760 million), “lift and sustain” aid
for allies (-$104 million). The bill also transferred $490 million in monies to counter
IEDs to the new account. These cuts were partly offset by additions for repairs of
M1A1 tanks for Army National guard units ($130 million like the House), additions
for Air Force optempo ($194 million) and transportation ($500 million), no reason
provided, plus a $73 million addition for family counseling and transition assistance
for service members.
Investment Funding Grows in FY2006 Without Clear Overall
Rationale. In its revised FY2006 supplemental request, DOD requested $14.6
billion for procurement, $1.7 billion below its original request in addition to the $8
billion included in the bridge supplemental. The Administration’s proposal did not
identify specific cuts by weapon system but only totals by account, so it was
sometimes not clear where the cuts would be taken. If enacted as proposed, FY2006
war-related procurement would total $22.7 billion compared to $18.8 billion
appropriated in FY2005.48 Although some of the decreases in the revised request
47 CRS calculations based on H.Rept. 108-622, p. 380 and H.Rept. 109-72, pp. 103-105.
48 CRS calculations based on DOD, FY 2006 Supplemental Request — war, p. 2; H.Rept.
109-148, p. 468, and H.Rept. 109-72, p. 114. DOD also transferred an additional $2.2
billion from its baseline budget to war-related procurement in FY2005, for a total of $20.9
(continued...)

CRS-36
reflected cuts made, others would reject additions proposed by the appropriators such
as for additional C-17 aircraft. The FY2006 original supplemental request included
the following:
! $3.1 billion for Army modularity equipment;
! $7.2 billion to reconstitute equipment;
! $2.6 billion for force protection items;
! $500 million for classified items;
! $1.2 billion for ammunition; and
! $692 million for SINCGARS radios for “transition teams supporting
OEF/OIF.”49
The supplemental also included substantial funding for tactical vehicles, such
as High Mobility Multi-Purpose Wheeled Vehicles ($410 million for Army
HMMWVs and $271 million for those of the Marine Corps), night vision devices
($173 million for the Army and $259 million for the Marine Corps), target devices
such as lightweight laser designator rangefinder ($95 million and $113 million for
Knight Family fire support and target designators for the Army), and additional
communication aids. Modification kits for aircraft (e.g., AH-64 helicopters in the
Army and AV-8s in the Navy) were also requested. Similar items were included in
the bridge fund, including, for example, over $1 billion for radios of various types.50
Rationales for Procurement Request Unclear. Although DOD’s request
included descriptions of individual procurement items, it did not give any rationale
or explain whether funding requests for various items reflect battlefield losses,
washout rates for worn equipment, equipment provided for state-side units whose
equipment remains overseas, or additional gear for deployed units. This made it
difficult to assess whether funding levels were too high, too low or about right. Nor
was it clear whether the Army and Marine Corps, in particular, had additional
unfunded requirements that would come due in later years or whether some of these
items were originally budgeted in the baseline budget but transferred to the
supplemental.

Carryover of FY2005 Procurement Monies. About $6 billion of
procurement monies appropriated in FY2005 remain to be obligated in FY2006. In
addition, much of the $8 billion for procurement in the FY2006 bridge fund is
probably still available.51 If DOD received an additional $16.4 billion in the FY2006
48 (...continued)
billion; see table in Appendix A.
49 DOD, FY 2006 Supplemental Request — war, p. 26.
50 Ibid., p. 2; H.Rept. 109-148, p. 468; H.Rept. 109-72, pp. 2, 14-16, 26, passim; see H.Rept.
109-359, pp. 477-482 for FY2006 bridge.
51 CRS calculation of unobligated balances is from comparing amounts appropriated in
FY2005 with obligations in DFAS, Defense Finance Accounting Service (DFAS),
Supplemental & Cost of War Execution Report, September 30, 2005; later reports not
available.

CRS-37
supplemental, DOD would have as much as $30 billion in procurement monies to
spend in FY2006 in addition to its baseline budget.
As part of its budget review, DOD set a goal that all supplemental procurement
funds should be obligated by the fourth quarter of the fiscal year. In light of the large
amount of funds and the fact that monies were not likely to be available until the
third quarter, it appeared unlikely that DOD would reach that goal. Although
procurement monies are generally available for three years, it could be argued that
a shorter period of time would be appropriate for urgently required procurement
funds, and would improve oversight.
Congressional Action. Although the conference agreement adopts a
procurement total of $15.0 billion — $2.6 billion below the House level and $450
million below the Senate level — some $1.1 billion of this decrease reflects the
transfer of procurement funds to counter IEDs from procurement to the new
consolidated account. Thus, the actual cut to the original request is closer to $1.5
billion with about $440 million taken from trucks and other logistical support
equipment, $210 million from the Bridge to Future Networks, a program still
undergoing testing, and cuts to various communications devices. The
Administration’s revised request included some of these cuts.
Conferees also include the congressional adds of $230 million for 3 V-22
aircraft, the $227 million to keep the C-17 aircraft line open, and $300 million to
keep open the line to upgrade M1A1 tanks. Like both houses, the enacted bill shifts
some of the funds requested to recapitalize old HMWWVs to buying more new
vehicles.
In prior congressional action, the House bill added $1.3 billion to the DOD
request for procurement funds, primarily to upgrade and keep open production lines
for M1A1 and M1A2 tanks ($400 million), and buy Tank Urban Survival Kits ($100
million), improved recovery vehicles ($100 million), 8 MQ-1 Predators ($77
million). The measure also proposed to spend $100 million to keep the C-17
production line open even though it is not clear whether additional planes will be
needed.
Preferring to buy new uparmored HMMWVs rather than rebuild old ones, the
House Appropriations Committee swapped $480 million in recapitalization monies
to buy new vehicles, bringing the total for new HMMWVs to $890 million, which
would buy about 6,850 vehicles at about $130,000 each.52 The Committee argued
that buying new vehicles was more appropriate because these would be uparmored
whereas the repaired vehicles would not and therefore would not be usable in
combat. If the recapitalized HMMWVs are not suitable for combat, then it was not
clear why DOD included that funding in the supplemental. DOD did not show how
their funding request meshes with the Army’s requirements in theater. In recent
years, the Army has received about $3.2 billion to purchase 18,129 uparmored
52 CRS calculation based on DOD, FY 2006 Supplemental Request - war, p. 24, which shows
that $410 million buys 3,146 HMMWVs.

CRS-38
HMMWVs, which is close to their March 2005 requirement, a requirement which
was increased in late February 2006.53
In its report, the Senate Committee stated its concern that DOD’s justification
for war-related procurement “includes only descriptive summaries . . . and is absent
of meaningful program and budget information, such as requirements, pricing and
delivery schedules.” For this reason, the committee warned that “Congress will not
be able to fully support supplemental requests unless it is provided with the same
detailed justification and program materials that is receives with the annual
request.”54
The Senate bill cut $940 million of DOD’s $16.4 billion procurement request
that included a transfer of $1.1 billion in Army procurement funds for countering
IEDs to the new centralized Joint IED Defeat Fund (see above). Additions to various
programs were largely offset by cuts elsewhere. The $700 million in cuts included
programs considered to be duplicative (-$111 million for Explosive Ordnance
Devices, -$30 million for communication equipment), not executable or ahead of
need (-$74 million for UH-1Y/AH-1Z helicopters, -$30 million for Hellfire missiles),
troubled (-$110 million from Joint Network nodes), or questionable (-$145 million
for LOGCAP trucks, trailers, and other equipment).
These cuts were offset by various increases. Like the House, the Senate added
funds to keep production lines open including $400 million for M1A1Abrams tank
improvements and $228 million for additional C-17 cargo aircraft. The Senate also
added $230 million to buy three V-22 aircraft, a long-troubled program which
recently completed operational testing, based on the rationale that these planes would
replace CH-46 and CH-53D helicopters that are being damaged or lost in combat.
Other additions were for more Predator UAVs primarily for Special Operations
Command ($85 million). Like the House, the SAC added funds for Abrams Tank
Urban Survival Kits ($100 million), and buys new HMMWVs rather than rebuilding
current ones.
Research and Development Emphasizes Improvised Explosive
Devices. The revised FY2006 supplemental requested $736 million (rather than
$782 million) in addition to the $50 million in bridge funds. About half — or $357
million — was for DOD’s efforts to counter the effects of all forms of Improvised
Explosive Devices (IEDs), reflecting the high priority placed on finding ways to
counter these devices. The remaining RDT&E projects appeared directed primarily
at enhancing the effectiveness of current systems. The FY2005 supplemental
included $587 million for RDT&E projects. It is unusual for RDT&E funds to be
provided in emergency supplementals because of the long-term nature of the work.
Congressional Action. The conference agreement proposes $711 million
for RDT&E, reflecting primarily the transfer of $357 million for joint IED research
to the new consolidated account as proposed by the Senate. This transfer is partly
53 The Army does not cite the new requirement in Army, “Armor Summary,” February 28,
2006, and “Wheeled Vehicle Summary,” March 2006.
54 S.Rept. 109-230, p. 23.

CRS-39
offset by an addition for classified programs to Air Force, RDT&E that was proposed
by both houses. The funds that DOD requested for research to counter IEDs to be
included in the centralized account may or may not be used for R&D. DOD is to
report its spending plan within 60 days of enactment.
Previously, the House bill provided $1 billion for RDT&E programs, adding
$220 million for classified projects. The SAC transferred $358 million in Army
RDT&E funds for countering IEDs to its new centralized transfer account, added
$320 million for a classified Air Force program, and made other small changes. The
net effect of these changes was a total of $710 million for RDT&E, $70 million
below the request.
Military Construction Request. The revised FY2006 supplemental
requested $406 million for military construction projects, a reduction of $79 million.
The original supplemental included:
! $348 million for Iraq;
! $80 million for Afghanistan;
! $22 million for planning and design; and
! $35 million for construction to support classified activities in the
United Kingdom.
According to the Defense Department, about $238 million was for force protection,
$36 million for airfield improvements, $28 million for fuel facilities, $42 million for
power, water and roads, and $83 million for support facilities. Congress scrutinized
these individual projects closely because of concerns about the United States
establishing an “enduring presence” in the region.
Congressional Action. As enacted, H.R. 4939 provides a total of $235
million for military construction projects, about $170 million below the revised
request. That total includes $49.6 million for projects in Afghanistan and $146
million for projects in Iraq. Conferees accept the Administration’s withdrawal of
three projects for Bagram, Afghanistan, for wastewater treatment and bulk storage
and one for an air control tower, but express some frustration with the lack of
explanation from the Administration for why these projects are no longer considered
emergencies. Conferees also provide $50 million rather than $167 million to build
a new road in Iraq to bypass urban areas to avoid Improvised Explosive Devices
(IEDs), a proposal that was questioned by both houses.
The conference agreement does not include the Biden amendment which
prohibited the use of funds in the act to establish permanent U.S. bases or exercise
U.S. control over the infrastructure or oil resources of Iraq and included no
explanation for this decision.55 Both houses cited concerns about DOD’s military
construction requests and called for bases to be “expeditionary” rather than
permanent.
55 H. Rept.109-494, p. 102..

CRS-40
In earlier action, the House measure cut $137 million of DOD’s $485 million
request for military construction, rejecting two projects to fix power plants at
National Security Agency stations in the United Kingdom as non-emergencies and
cutting $107 million from an Army proposal to build new roads in Iraq to bypass
urban areas to avoid Improvised Explosive Devices (IEDs), a rationale not
convincing to the committee.
The House Committee also cited concerns about DOD’s “substantial military
construction expenditures of a magnitude normally associated with permanent
bases,” for “expeditionary” bases that are supposed to be austere. and
“expeditionary.” The Committee believed that military construction requirements
for contingency operations should be considered in regular authorization and
appropriations bills. Concerned about not having DOD’s updated master plan for
Central Command, the House panel also placed a hold on military construction funds
until that report is provided.
Echoing the concerns of the House, the Senate Committee report stated that
military construction projects should be “of an emergency nature,” and appropriate
for “expeditionary” types of bases in order to be consistent with the “current policy
of the United States to establish no permanent military bases in Iraq;” projects should
be limited to those which “immediately support operations ongoing in Iraq rather
than those requests which propose a longer-term presence.”56 The Senate measure
cut funds for war-related military construction by $200 million providing for a total
of $278 million.
Except for an air control tower no longer needed, the Senate funded all projects
requested by DOD for Iraq, but at lower levels. The bill cut most of the funds from
a $167 million Army proposal to build roads bypassing urban areas in order to reduce
the threats from IED (-$128 million), a project also questioned by the House, and
reduces funding for two projects at Talil Air Base, a dining facility and a convoy
support center (-$43 million). The Senate measure also eliminated three projects at
Bagram Air Base in Afghanistan because DOD’s master plan did not take NATO
presence or cost-sharing into account. H.R. 4939, as passed by the Senate, funded
two projects in the U.K. that the House rejected.57
Flexibility Issues: Transfer Limits. In the supplemental, DOD requested
transfer authority that would allow the department to move funds between
appropriation accounts after enactment of up to $4 billion of the $67.9 billion
requested — with the notification and approval of the defense committees. This level
was $1 billion higher than the $3 billion level set for the $75.6 billion in the FY2005
supplemental.
The Department could also transfer up to $2.5 billion of the $50 billion in the
FY2006 bridge fund. The supplemental request also asked Congress to raise the
current transfer limit of $3.75 billion in the regular FY2006 DOD appropriations Act
to $5 billion to allow DOD to respond to unanticipated needs in the global war on
56 S. Rept 109-230, p. 46.
57 S.Rept. 109-230, p. 46-47.

CRS-41
terror. DOD also requested authority to “advance bill” the services for maintenance
or supplies, a way to generate cash reserves for working capital funds, which also
increases flexibility.
Congressional Action. To give DOD additional flexibility in managing
funds, the conference agreement raises the general transfer limit applying to FY2006
regular DOD monies from $3.75 billion to $5 billion, as requested. The new level
is higher than the levels proposed by either house — $4.35 billion in the Senate and
$3.75 billion in the House. This level also does not include a pending transfer of
regular funds to meet war-related needs.58
Like the House and Senate, conferees adopt a cap of $2 billion on transfers of
funds in this bill for war rather than the $4 billion ceiling requested, and reject
DOD’s request to allow transfers of military construction funds. Conferees adopt a
limit of $1.2 billion for advance billings, providing additional flexibility to working
capital funds which finance the purchase of supplies and services. That level is the
level proposed by the Senate, and $300 million below the House level and $800
million less than requested.
Intelligence Community Management Account. The Administration
requested $178 million, in addition to the $418 million already received for FY2006
to “accelerate the stand-up of the Office of the Director of National Intelligence
(ODNI), sustain national Counterterrorism Center (NCTC) Operations, continue
implementation of the recommendations of the Silberman-Robb Commission on U.S.
Intelligence Relating to Weapons of Mass Destruction (WMD Commission), and
rapidly deploy a global capability to warn against the outbreak of avian influenze.”59
Details were classified.
Congressional Action. Conferees endorse the $158 million funding level
for the Intelligence Community Management Account, as proposed in both the
House- and Senate-passed bills. This is a reduction of $20 million from the request.
International Affairs Supplemental
The President sought $4.2 billion in FY2006 supplemental funding supporting
a broad range of foreign policy activities:
! U.S. diplomatic costs in Iraq and Afghanistan
! Additional U.S. stabilization assistance to Iraq
! Additional Afghanistan reconstruction aid
! Public diplomacy and democracy promotion programs for Iran
! Darfur humanitarian relief and peace implementation aid in Sudan
! Pakistan earthquake reconstruction
58 Reprogramming DOD06-13PA would not count against the ceiling; see Sec. 1202 in H.R.
4939 and H.Rept. 109-494, p.
59 OMB, FY2006 Supplemental War Request.

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! Liberia refugee repatriation
! Food assistance for east and central Africa
Table 11. State Department and Foreign Aid Funds in FY2006
Supplemental
($s — millions)
Activity (account)*
Request
House
Senate
Conf.
Iraq:a
U.S. mission operations (DCP)
$1,097.5
$1,116.1 $1,037.5
$1,097.5
Provincial reconstruction teams support (DCP)
$400.0
$208.0
$300.0
$229.8
Special Inspector General & State IGb
$25.3
$25.3
$25.3
$25.3
USAID security and operations (OE)
$119.6
$61.6
$119.6
$101.0 c
U.S. Peace Institute
$0.0
$1.3
$0.0
[$1.0]
Subtotal, Iraq mission security and support
$1,642.4
$1,412.3 $1,482.4
$1,453.6
Provincial reconstruction teams/employment (ESF)d
$675.0
$675.0
$675.0 $1,485.0 e
Infrastructure security (ESF)
$287.0
$287.0
$287.0
e
Infrastructure sustainment (ESF)
$355.0
$355.0
$355.0
e
Nat’l capacity building — democracy & rule of law
(ESF)c
$172.0
$172.0
$172.0
e
Prison construction/Protection of judges (INL)
$107.7
$81.4
$104.4
$91.4
Financial integration & security promotion (IFTA)
$13.0
$13.0
$13.0
$13.0
Subtotal, Iraq stabilization assistance
$1,609.7
$1,583.4 $1,606.4
$1,589.4
Total, Iraq
$3,252.1
$2,995.7 $3,088.8
$3,043.0
Afghanistan:f
U.S. mission security (DCP)
$50.1
$50.1
$50.1
$50.1
USAID security (OE)
$16.0
$0.0
$16.0
c
Subtotal, Afghanistan mission security
$66.1
$50.1
$66.1
$50.1
Power sector projects (ESF)
$32.0
$5.0
$32.0
$32.0
Debt cancellation
$11.0
$0.0
$11.0
$11.0
Afghan refugees returning from Pakistan (MRA)
$3.4
$3.4
$7.4
$3.4
Subtotal, Afghanistan assistance
$46.4
$8.4
$50.4
$46.4
Total, Afghanistan
$112.5
$58.5
$116.5
$96.5
Iran:
Public diplomacy/independent TV & radio (DCP)
$5.0
$5.0
$5.0
$5.0
Iranian student fellowships/visitor programs (ECEP)
$5.0
$5.0
$5.0
$5.0
Broadcasting (Request = ESF;
$50.0
$36.1
$30.3
$36.1
House/Senate/Conference = BBG)
Democracy programs (Request = ESF;
$15.0
$10.0
$34.8
$20.0
House/SenateConference = Democracy Fund)

CRS-43
Activity (account)*
Request
House
Senate
Conf.
Total, Iran
$75.0
$56.1
$75.1
$66.1
Sudan/Darfur:
USAID mission in Juba (OE)
$6.0
$0.0
$6.0
c
Refugees returning to southern Sudan (MRA)
$12.3
$12.3
$12.3
$12.3
Food aid for southern Sudan (PL 480)
$75.0
$75.0
$75.0
$75.0
U.N. peacekeeping in Southern Sudan (CIPA)
$31.7
$31.7
$31.7
$31.7
Subtotal, southern Sudan
$125.0
$119.0
$125.0
$119.0
Humanitarian relief in Darfur (IDFA)
$66.3
$66.3
$66.3
$66.3
Refugees/conflict victims in Darfur & Chad (MRA)
$11.7
$11.7
$11.7
$11.7
Food aid for Darfur (PL480)
$150.0
$150.0
$150.0
$150.0
African Union peacekeeping mission, Darfur (PKO)
$123.0
$173.0
$173.0
$173.0
U.N. peacekeeping mission in Darfur (CIPA)
$38.1
$98.1
$98.1
$98.1
Subtotal, Darfur
$389.1
$499.1
$499.1
$499.1
Total, Sudan/Darfur
$514.1
$618.1
$624.1
$618.1
Liberia:
Refugee repatriation (MRA)
$13.8
$13.8
$13.8
$13.8
Economic aid (ESF)
$0.0
$50.0
$50.0
$50.0
Total, Liberia
$13.8
$63.8
$63.8
$63.8
Other Refugee Aid (MRA and ERMA) h
$0.0
$0.0
$62.5
$17.5
Haiti (ESF and CSH)
$0.0
$0.0
$40.0
$20.0
Congo (Democracy Fund and PKO)
$0.0
$0.0
$13.2
$7.5
Jordan (ESF)
$0.0
$0.0
$100.0
$50.0
Pakistan earthquake reconstruction (various) g
$126.3
$126.3
$126.3
$126.3
Food aid, East and Central Africa (PL480)
$125.0
$125.0
$125.0
$125.0
Drought relief for West/Horn of Africa (IFDA)
$0.0
$0.0
$35.0
$25.0
Food aid for refugees through WFP (MRA)
$10.0
$10.0
$20.0
$12.0
Colombia (House = INL; Senate = MRA & INL)
$0.0
$26.3
$5.8
$16.3
Hurricane Stan relief for Guatemala (DA)
$0.0
$0.0
$12.0
$6.0
Burma refugees (MRA)
$0.0
$0.0
$0.0
$5.0
Rescission of prior aid to Egypt (ESF)
$0.0
$0.0
($47.0)
$0.0
Rescission (House = Peacekeeping funds; Senate
$0.0
($17.0)
($13.2)
($44.0)
= Export-Import Bank)

CRS-44
Activity (account)*
Request
House
Senate
Conf.
TOTAL, State Dept. & Foreign Aid Funds
$4,228.8
$4,062.8 $4,447.9
$4,254.1
Source: Department of State and CRS calculations based on H.Rept. 109-388, S.Rept. 109-230, and
H.Rept. 109-494, with modifications to reflect House and Senate floor amendments.
* State Department appropriation account acronyms: CIPA = Contributions for International
Peacekeeping Activities; DCP = Diplomatic and Consular Programs; ECEP = Educational and
Cultural Exchange Program.
Foreign Operations appropriation account acronyms: ESF = Economic Support Fund; IDFA =
International Disaster and Famine Assistance; IFTA = Treasury Dept’s International Affairs Technical
Assistance; INL = International Narcotics & Law Enforcement; MRA = Migration and Refugee
Assistance; OE = US Agency for International Development Operating Expenses; PKO =
Peacekeeping Operations.
a. In addition to these figures for Iraq, the supplemental includes other aid-related amounts for Iraq:
- DOD train & equip Iraq security forces — $3.7 billion request; $3 billion House; $3.7
billion Senate; $3 billion conference.
- FBI operations & support in Iraq and Afghanistan — $32.5 million request; overall FBI
funds reduced in House, Senate, and conference bills, so levels for Iraq and Afghanistan
may be reduced as well, at the discretion of the Administration.
- Department of Justice’s United States Attorneys Office and the U.S. Marshals Service
for legal support for Iraq’s criminal justice system — $5.5 million request; $3 million
House; $4.5 million Senate; $4 million conference.
- Bureau for Alcohol, Tobacco, Firearms, and Explosives for firearms trafficking,
explosives, and arson operations in Iraq — $5 million request; $4.1 million House; $4
million Senate and conference.
- Treasury Department for the Iraq Finance Cell and to place a Deputy Treasury Attache
in Iraq — $1.8 million request, House, Senate, and conference.
b. Of the $25.3 million, $24 million is for the Special IG for Iraq Reconstruction and $1.3 million
supports the work of the regular State Department’s IG in Iraq and Afghanistan.
c. The conference agreement combines amounts for USAID OE expenses in Iraq, Afghanistan, and
Sudan without specifying a total for each mission. The $101 million figure for Iraq includes
some amounts for Afghanistan and Sudan.
d. In addition to new appropriations for these activities, the House bill directed that funds be
transferred from previous Iraq Relief and Reconstruction Fund (IRRF) appropriations for
Provincial Reconstruction Teams ($152 million) and for democracy and rule of law programs
($33.5 million). These amounts were the same as what the Administration had planned to spend
for these activities out of the IRRF account. The Senate bill directed that $104.5 million of ESF
for Iraq should be available for broad-based democracy programs in Iraq. The conference
agreement includes $50 million for democracy, rule of law, and reconciliation programs within
the ESF total.
e. The $1.485 billion ESF total for Iraq includes funding for all Iraq stabilization ESF activities.
f. In addition to these figures for Afghanistan, the supplemental includes other aid-related amounts
for Afghanistan:
- DOD train and equip Afghan security forces — $2.2 billion request; $1.85 billion
House; $1.91 billion Senate and conference.
- DOD counter-drug activities in Afghanistan and Central Asia — $192.8 million request;
$156.8 million House; $154.6 million Senate; $150.5 million conference.
- FBI operations and support in Iraq and Afghanistan — $32.5 million request; overall
FBI funds reduced in House, Senate, and conference bills, so levels for Iraq and
Afghanistan may be reduced as well, at the discretion of the Administration.
g. Funds would reimburse several USAID accounts — Development Aid, Child Survival,
International Disaster & Famine Assistance, and ESF — for previously reprogrammed money,
plus support ongoing reconstruction projects in Pakistan.
h. The Senate added $42.5 million in MRA funds that included Somalia ($3 million); Horn and
W.Africa ($10 million); Congo ($15 million); UNCHR ($4 million); North Caucasus ($2.5
million); North Asia ($3 million); and Burma ($5 million). In addition, the Senate bill provided

CRS-45
$20 million for Emergency Refugee and Migration Assistance (ERMA) for the Horn of Africa.
The conference agreements provides $5 million for MRA programs in Burma plus $17.5 million
for “other” MRA programs. The conference agreement provides no funds for ERMA.
U.S. Diplomatic Mission Operations in Iraq60
Currently, the U.S. Embassy in Iraq has over 1,000 American and locally
engaged staff representing about 12 agencies. Of this total, 156 U.S. direct hires and
155 locally engaged staff represent the Department of State (DOS) in the U.S.
Mission. The Bush Administration requested an FY2006 supplemental of $1.497
billion within State’s Diplomatic and Consular Programs budget account to cover
Iraq operations and security.
Available FY2006 funds for the U.S. Mission in Iraq’s regular operations
consist of $632.7 million in carryover funds from FY2005. While about $65 million
was requested for FY2006 regular operations for the U.S. Mission in Iraq, the
Department of State says much of that was lost due to rescissions. Therefore, the
Administration sought $997.5 million to cover ongoing operation and security costs
for the U.S. Mission in Iraq, $100 million for overhead protection of personnel in
facilities other than the Embassy, and $400 million for movement security of the
Provincial Reconstruction Team. State intends for the carryover and supplemental
total of $1.630 billion to cover costs for the remainder of FY2006 and the first half
of FY2007.
The Department of State estimates the FY2006 total program funding
requirement for Mission operations and security in Iraq to be $1.1 billion. This
includes $192.7 million for logistic support which includes trailer camps, food
service, maintenance of transportation facilities and equipment, and laundry; $70 .8
million for basic operations and logistics for the DOS American direct hires and local
hires; $81.8 million for operational costs for the four regional embassy offices in
Mosul, Kirkuk, Hillah, and Basrah, Provincial Reconstruction Teams and state
embedded teams, as well as contractor support for the Iraq Reconstruction
Management Office, offshore support, public diplomacy, education, and outreach
programs. According to DOS, FY2006 security budget needs total $735.4 million
and include $55 million for guards at facilities in Iraq, $617.9 million for high threat
protection provided to personnel whenever they travel outside of the protected
compound, and $62.5 million for equipment such as armored vehicles, as well as
physical and technical security measures. Additionally, $19.9 million is needed for
information technology operations for a country-wide emergency radio program for
the embassy, the State Department estimates.
Congressional Action. In total, the conference agreement for H.R. 4939
provides $1.1 billion for U.S. mission operations in Iraq, the same as the request.
Previously, the House bill had provided $1.116 billion, adding funds for logistics
support and information technology, but reducing amounts for basic operations of the
mission. The Senate measure had reduced the President’s request by $60 million, to
60 Prepared by Susan Epstein, Specialist in Foreign Policy and Trade.

CRS-46
a total of $1.04 billion. The reduction came on an amendment by Senator Menendez
that used this account as an offset in order to increase funds for peacekeeping in
Darfur.
In addition, the conference bill reduces the $400 million request to $229.8
million for security costs associated with the Provisional Reconstruction Teams
(PRTs) in Iraq. The House had recommended $208 million for PRTs while the
Senate measure proposed $300 million.
For USAID mission security funds in Iraq, House-Senate conferees provide
$101 million for combined additional USAID operating expenses in Iraq,
Afghanistan, and Sudan, but did not specify a precise level for Iraq. The
Administration had proposed $119.6 million for expenses in Iraq alone, and a
combined total of $141.6 million for mission operations in the three posts. While the
Senate-passed bill fully funded the USAID OE request for Iraq, the House cut the
proposal $61.6 million. The House Appropriation Committee noted that the amounts
provided in the House measure were for FY2006, and that the $58 million balance
for FY2007 would be covered by the transfer of unobligated balances remaining in
the Iraq Relief and Reconstruction Fund (IRRF) enacted in the FY2004 emergency
supplemental appropriation act.
Iraq Stabilization Assistance61
Of the total requested for non-DOD Iraq funding, roughly half — $1.6 billion
— was intended for so-called “stabilization” assistance. By entitling its effort
“stabilization” instead of “reconstruction,” the Administration appeared to be
emphasizing that the new funds were not going to be used for actual construction of
economic infrastructure, as nearly 40% of reconstruction funds from all spigots have
been employed previously. For all intents and purposes, however, these funds would
bolster many of the existing economic infrastructure programs currently being
conducted under the Iraq Relief and Reconstruction Fund (IRRF). They would also
provide continued support to the democratization and governance programs that,
along with health, education, and private sector assistance, currently account for
about 22% of all aid to Iraq. In the FY2007 Foreign Operations appropriations
request, the Administration has proposed an additional $749 million, mostly for
similar democratization and rule of law programs.62 The training and equipping of
security forces, once funded under the IRRF, and currently accounting for about 38%
of total aid to Iraq, are now supported under the DOD-managed Iraq Security Forces
Fund (ISFF).
The supplemental funding request chiefly appeared to address three major issues
of current concern to those implementing the reconstruction program:
! Security. Reconstruction progress has been severely undermined by
the insurgency which has directly targeted key infrastructure for
61 Prepared by Curt Tarnoff, Specialist in Foreign Affairs.
62 The House, in H.R. 5522, reduced the FY2007 Iraq request to $522 million.

CRS-47
destruction. The supplemental proposed $287 million to help secure
oil, electricity, and water infrastructure.
! Sustainability. As more large-scale construction projects have been
completed with U.S. assistance, there has been increasing concern
regarding the financial and technical capacity of Iraqis to maintain
them in the long run. The supplemental requested $355 million to
assist the Iraqis to operate, maintain, and sustain these projects. In
the past, this has been accomplished largely by providing training
and replacement parts.
! Provincial Reconstruction Teams (PRTs). Following the example
established in Afghanistan, the State Department sought to set up at
least eight PRTs throughout Iraq, up from the three established in the
past few months. PRTs consist of officials from USAID, State, the
military, and other agencies who work with Iraqi local government
committees to identify economic and political development projects
that can be implemented with U.S. financing. While enabling aid
workers to escape the isolation of the “green zone” and expand
outreach to the provinces, they are also viewed as a way to improve
coordination of aid, especially of DOD-CERP funds and State-
controlled funding. Reported concerns regarding the availability of
sufficient “volunteers” to staff the PRTs as well as questions
regarding the willingness of the U.S. military to divert personnel to
provide adequate security may hinder their planned development.
The Administration proposed $675 million to be disbursed by the
PRTs (a separate request of $400 million in PRT operational costs
is discussed above).
Table 12. Iraq Stabilization and State Department Operations
($s — millions)
FY2006
FY2006
FY2006
FY2006
FY2007
Activity
Supp.
Supp.
Supp.
Supp.
Regular
(appropriation account)a
Request
House
Senate
Enacted
Request
Provincial reconstruction
teams/employment (ESF)b
$675.0
$675.0
$675.0 $1,485.0 c
—
Infrastructure security (ESF)
$287.0
$287.0
$287.0
c
—
Infrastructure sustainment (ESF)
$355.0
$355.0
$355.0
c
$154.0
Nat’l capacity building-democracy &
rule of law (ESF)b
$172.0
$172.0
$172.0
c
$112.3
Prison construction/Protection of
$107.7
$81.4
$104.4
$91.4
$1.0
judges (INCLE)
Ministry of Finance technical
$13.0
$13.0
$13.0
$13.0
—
assistance (IFTA)

CRS-48
FY2006
FY2006
FY2006
FY2006
FY2007
Activity
Supp.
Supp.
Supp.
Supp.
Regular
(appropriation account)a
Request
House
Senate
Enacted
Request
U.S. mission operations/Provincial
$1,497.5
$1,324.1
$1,337.5
$1,327.3
$65.0
reconstruction teams (DCP)
Special Inspector General & State IG
$25.3
$25.3
$25.3
$25.3
—
USAID mission security and
operations (USAID/OE)d
$119.6
$61.6 d
$119.6
$101.0 d
—
U.S. Peace Institute
$0.0
$1.3
$0.0
[$1.0]
—
Subtotal, Aid and State Department
$3,252.1
$2,995.7
$3,088.8
$3,043.0
$332.3
Operations
Criminal Justice System Legal Support
$5.5
$3.0
$4.5
$4.0
—
(DOJ)
Firearms Trafficking, explosives, arson
$5.0
$4.1
$4.0
$4.0
—
ops (BATFE)
Iraq Threat Finance Cell and Treasury
$1.8
$1.8
$1.8
$1.8
—
Attache (DOT)
TOTAL, Iraq
$3,264.4
$3,004.6
$3,099.1
$3,052.8
$332.3
Source: Department of State and CRS calculations based on H.Rept. 109-388, S.Rept. 109-230, and
H.Rept. 109-494, with modifications to reflect House and Senate floor amendments.
Note: Data in this table reflect ongoing and FY2007 proposed funding for programs the same as or
similar to those requested in the FY2006 supplemental. The TOTAL line does not represent total aid
or mission operations for Iraq. Excluded from this table is $32.7 million requested for FBI operations
in both Iraq and Afghanistan.
a. See Table 11 for listing of appropriation account acronyms.
b. In addition to new appropriations for these activities, the House bill directed that funds be
transferred from previous Iraq Relief and Reconstruction Fund (IRRF) appropriations for
Provincial Reconstruction Teams ($152 million) and for democracy and rule of law programs
($33.5 million). These amounts were the same as what the Administration had planned to spend
for these activities out of the IRRF account. The Senate bill directed that $104.5 million of ESF
for Iraq should be available for broad-based democracy programs in Iraq. The conference
agreement provides $50 million for democracy, rule of law, and reconciliation programs.
c. The $1.485 billion ESF total for Iraq includes funding for all Iraq stabilization ESF activities.
d. The House bill directed that $58 million be transferred from the IRRF to provide USAID mission
security in FY2007. The conference agreement combines amounts for USAID OE expenses in
Iraq, Afghanistan, and Sudan without specifying a total for each mission. The $101 million
figure for Iraq includes some amounts for Afghanistan and Sudan.
Like the FY2007 request, the FY2006 supplemental request would provide
significant funding to governance, democratization and rule of law programs at all
levels of government in Iraq. These efforts would include $125 million to help the
Iraqi ministries to improve their ability to operate, $37 million to assist the Iraqi
Special Tribunal that is investigating and trying Saddam Hussein and others, $100
million to construct correctional facilities, and $10 million for broad democracy
activities such as parliamentary and civil society development.

CRS-49
The proposed legislation would also amend the FY2004 supplemental to alter
the allocation of $18.4 billion that had been approved by Congress for each major
reconstruction sector — most recently by statute in September 2004. Periodically,
the allocations had been changed to the extent allowed by law without need for
further legislation. The amendment proposed would give the Administration greater
flexibility by aligning the legislated allocations with current needs, by making
remaining funds available for four years from the current expiration date of end of
FY2006, and by allowing any obligated funds to be reobligated regardless of sectoral
allocation restrictions.
Congressional Action. As enacted, H.R. 4939 provides $1.59 billion for
the Iraq stabilization aid, slightly higher than the House-passed level, but about $20
million less than the request and the Senate. Within the total, conferees direct that
$50 million support USAID’s Iraq Community Action Program, of which $5 million
is transferred to the Marla Ruzicka Iraqi War Victims Fund. The Senate measure had
allocated $75 million and $10 million, respectively, for these two activities. The
final bill further allocates $50 million for democracy, rule of law, and reconciliation
programs and identifies seven organizations that will administer the funds. Through
an amendment by Senator Kennedy, the Senate-passed measure had directed that
$104.5 million should be used for broad-based democracy programs, managed by
non-governmental organizations in Iraq.
The enacted bill also extends the expiration date for use of the IRRF by one year
to the end of FY2007 instead of to the end of FY2010, as requested. Conferees,
however, did not include a provision described by the House Appropriations
Committee as an effort to bring the Iraq program into the structure of a more
traditional foreign aid program. The House-passed measure had included language
that would transfer from the IRRF into ESF $185.5 million. This amount was equal
to that of IRRF funding previously allocated to projects, such as those supporting the
PRTs and Ministerial Capacity Development, which also were to be funded with new
FY2006 supplemental appropriations.
In earlier congressional action, the House-passed bill included nearly full
funding of the request, reduced primarily by an amendment offered by Representative
Burton that redirected $26.3 million from Iraq for prison construction and protection
of judges in order to increase funding for Colombia’s counter-narcotics programs.
In addition, H.R. 4939, as passed in the House, rejected the proposed re-allocation
of funds within the IRRF that would have allowed the Administration greater future
flexibility to move funds between sectors. In report language, the Committee
directed that no new funding for the PRTs is to be permitted until an assessment of
pilot PRTs, a program plan, and other reporting requirements are met by the
Department of State. The Senate bill fully funded the request at $1.6 billion.
Afghanistan63
The FY2006 supplemental request included several provisions intended to
continue U.S. efforts to stabilize Afghanistan and continue security and economic
63 Prepared by Kenneth Katzman, Specialist in Middle Eastern Affairs.

CRS-50
reconstruction efforts. The supplemental was in addition to about $877 million in
total foreign aid previously appropriated for Afghanistan in FY2006. The
supplemental request further followed the Administration proposal for about $1.1
billion in FY2007 aid funds. Key elements of the supplemental request were:
! $16 million for FY2007 security requirements for USAID operations
in Afghanistan;
! $50 million for the State Department for security costs of protecting
U.S. facilities and personnel. This would more than double the
amount already appropriated in regular FY2006 appropriations;
! $3.4 million in refugee assistance to support shelter and ensure food
supplies to Afghan refugees returning from Pakistan. UNHCR
expects that about 730,000 Afghans will return in FY2006, nearly
twice as many as previously estimated. This would augment $36.8
million already allocated to help repatriate Afghan refugees this
year;
! $11 million as a subsidy appropriation that would cover the costs of
cancelling roughly $110 million in debt owed by Afghanistan to the
United States. If not provided in the supplemental spending
measure, the Administration said that it would be necessary to
reallocate existing foreign aid funds for Afghanistan in order to
provide the debt relief; and
! $32 million in ESF for emergency power sector projects needed for
a larger “Northeast Transmission Project” which would supply
electricity to Kabul and other northern cities and reduce
Afghanistan’s need to import diesel fuel.
Table 13. Afghanistan Aid Supplemental
($s — millions)
FY2006 FY2006 FY2006 FY2006 FY2006 FY2007
Activity
FY2005 Regular
Supp.
Supp.
Supp.
Supp.
Regular
(appropriation account)a
Actual Enacted Request
House
Senate
Conf.
Request
Infrastructure aid (ESF)
$379.2
$145.0
$32.0
$5.0
$32.0
$32.0
$230.0
Debt relief
—
—
$11.0
$0.0
$11.0
$11.0
—
Afghan refugees (MRA)
$47.1
$36.8
$3.4
$3.4
$7.4
$3.4
$38.0
U.S. mission security
$90.5
$47.0
$50.1
$50.1
$50.1
$50.1
$82.0
(DCP)
USAID mission security
$37.3
$9.7
$16.0
$0.0
$16.0
b
$13.3
(OE)
Total
$554.1
$238.5
$112.5
$58.5
$116.5
$96.5
$363.3

CRS-51
Source: Department of State and CRS calculations based on H.Rept. 109-388, S.Rept. 109-230, and
H.Rept. 109-494, with modifications to reflect House and Senate floor amendments.
Note: Data in this table reflect ongoing and FY2007 proposed funding for programs the same as or
similar to those requested in the FY2006 supplemental. The total line does not represent total aid or
mission operations for Afghanistan. Excluded from this table is $32.7 million requested for FBI
operations in both Iraq and Afghanistan.
a. See Table 11 for listing of appropriation account acronyms.
b. USAID mission security funds are included in a total appropriation of $101 million available for
missions in Iraq, Afghanistan, and Sudan.
In addition to proposed foreign aid and diplomatic/security resources, the
Administration further sought substantial amounts of Defense Department funds for
security force training and counter-narcotics activities. The DOD portion of the
supplemental included $2.2 billion for an “Afghan Security Forces Fund” to continue
the effort to equip and train the 35,000-member Afghan National Army (ANA) and
55,000-person Afghan National Police (ANP). The ANP is near its target size, but
the building of the ANA has progressed more slowly than expected and it is about
half its target size. In addition, $192.8 million would support U.S. military assistance
to U.S. and Afghan counter-narcotics efforts in Afghanistan. The Defense
Department supports the effort by transporting U.S. and Afghan counter-narcotics
teams, providing search and rescue for them, and other support. Prior to FY2005,
both the security force assistance and counter-narcotics programs were funded out
of the State Department’s budget, not DOD.
Congressional Action. H.R. 4939, as enacted, fully funds the request for
State Department mission security and assistance for Afghanistan. Conferees,
however, did not specifically allocate USAID mission security funds among Iraq,
Afghanistan, and Sudan. Because the $101 million for all three operations is well
below the $141.6 million request, it is likely that funding for mission security in
Afghanistan will fall below the $19.6 million request.
In earlier actions, the Senate-passed measure funded Afghanistan aid and
operations activities at the proposed levels while the House bill proposed about half
the requested level. The House measure provided $5 million for the Northwest
Kabul Power Plant, but deferred consideration of $27 million for the Northeast
Transmission system. The House also deferred action on $11 million for cancelling
Afghanistan’s debt owed to the United States and on $16 million for USAID mission
security in the country. In reporting the bill, the House Appropriations Committee
noted that the regular FY2006 appropriation provided $205 million for infrastructure
and other reconstruction that cannot be obligated until Secretary Rice certifies that
Afghanistan is fully cooperating with poppy eradication and interdiction efforts.
Since the certification had not been issued, the Committee felt that additional funds
should not be provided until it was certain that existing appropriations will be made
available.
On related Afghan funding matters, conferees provide $1.91 billion out of DOD
funds for Afghan security force training, the same as passed the Senate. This is
higher than the House level of $1.85 billion, but below the $2.2 billion request. The
enacted measure also cuts DOD funding for Afghan counter-narcotics programs to

CRS-52
$150.5 million, well below the $193 million request, and slightly less than House and
Senate levels of $157 million and $154.6 million, respectively.
Iran64
The FY2006 supplemental request sought significant increases in funding for
pro-democracy activists in Iran. Although characterized as support for “democracy
promotion,” the funding increase appeared to some to reflect a step towards pursuing
a “regime change” option in U.S. policy toward Iran. The request appeared to
indicate that the Administration believed that international diplomacy with Iran to
curb its nuclear program was faltering, and that the risks of angering Iran’s
government had been reduced.
The United States began funding Iranian pro-democracy groups in FY2004. The
Foreign Operations appropriation for FY2004 (P.L. 108-199) earmarked up to $1.5
million for “grants to educational, humanitarian and non-governmental organizations
and individuals inside Iran to support the advancement of democracy and human
rights in Iran.” The State Department’s Bureau of Democracy and Labor (DRL) gave
$1 million of those funds to a U.S.-based organization, the Iran Human Rights
Documentation Center, to document abuses in Iran, using contacts with Iranians in
Iran. The FY2005 Foreign Operations appropriation (P.L. 108-447) provided an
additional $3 million for similar democracy promotion efforts in Iran. State’s DRL
says it did not publicly announce winning grantees on security grounds, but that
priority areas were political party development, media development, labor rights,
civil society promotion, and promotion of respect for human rights. The FY2006
Foreign Operations appropriation (P.L. 109-102) expands the program further,
appropriating up to $10 million in democracy promotion funds for use in Iran, drawn
from a “Democracy Fund” and the Middle East Partnership Initiative (MEPI).
On February 15, 2006, Secretary Rice testified before the Senate Foreign
Relations Committee that the Administration planned to seek supplemental FY2006
funds totaling $75 million, to be controlled by the State Department, for democracy
promotion in Iran. According to the supplemental request:
! $15 million would be used to support civic education in Iran and
help organize Iranian labor unions and political organizations
(through such U.S. organizations as the International Republican
Institute, National Democratic Institute, and National Endowment
for Democracy.
! $5 million was to go to Educational and Cultural Exchange
Programs to sponsor Iranian students to visit the United States
! $5 million would be for Internet and other media efforts to reach the
Iranian public.
64 Prepared by Kenneth Katzman, Specialist in Middle Eastern Affairs.

CRS-53
! $50 million would be used for increased U.S. broadcasting to Iran.
Although these funds were requested under the Economic Support
Fund account, and not through the independent (non-State
Department) Broadcasting Board of Governors, which normally
manages U.S. broadcasting operations, the request sought authority
to transfer the funds “if necessary,” to Radio Free Europe/Radio
Liberty (RFE/RL)-operated broadcasting services into Iran that
began in October 1998.65 As of December 2002, the radio service
has been called Radio Farda (“Tomorrow” in Farsi), which now
broadcasts 24 hours per day. A U.S.-sponsored television broadcast
service to Iran, run by the Voice of America (VOA), began
operations on July 3, 2003, and now broadcasts three hours a day.
However, the Administration says that some of the funding might be
used for U.S.-based exile-controlled media broadcasting.
Congressional Action. H.R. 4939, as enacted, provides $66.1 million for
Iran programs, below the $75 million, but about midway between the House- and
Senate-passed levels of $56.1 million and $75.1 million, respectively. Conferees
fully fund student exchanges and media-related proposals, increase democracy
programs to $20 million, and reduce the request for broadcasting to $36.1 million.
Instead of providing these latter funds through the flexible Economic Support Fund
account, the final bill, as proposed by the House and Senate, channels the money
through the Broadcasting Board of Governors, the traditional way of funding
international broadcasting operations.
During earlier consideration, the House rejected three amendments — two
offered by Representative Garrett and one by Representative Foxx — that would
have collectively deleted $46.1 million of the $56.1 million included in the bill for
Iran programs.
Sudan — Darfur and Other Sudan66
The Administration sought a total of $514 million in supplemental funds for
Sudan, divided between humanitarian and peacekeeping support in the Darfur region
($389 million) and other parts of Sudan, mainly in support of the North-South Peace
Agreement ($125 million).
Darfur Crisis. The crisis in Darfur began in February 2003, when two rebel
groups emerged to challenge the National Islamic Front (NIF) government in Darfur.
The Sudan Liberation Army (SLA) and the Justice and Equality Movement (JEM)
claim that the government of Sudan discriminates against Muslim African ethnic
groups in Darfur and has systematically targeted these ethnic groups since the early
1990s. The government of Sudan dismisses the SLA and JEM as terrorists. The
conflict in Darfur burgeoned when the government of Sudan and its allied militia
65 The service began when Congress funded it ($4 million) in the FY1998 Commerce,
Justice, and State Departments appropriation (P.L. 105-119). It was to be called “Radio
Free Iran.”
66 Prepared by Ted Dagne, Specialist in International Relations.

CRS-54
began a campaign of terror against civilians in an effort to crush the rebellion and to
punish the core constituencies of the rebels. Since 2003, an estimated 300,000-
400,000 civilians have been killed, more than two million have been displaced and
currently live in camps, and more than half of the population have been affected
directly and are dependent on international support. The atrocities against civilians
continue in Darfur, according to U.N. reports, U.S. officials, and human rights
groups. Congress and the Bush Administration have called the atrocities genocide.
The African Union has deployed an estimated 7,700 peacekeeping troops, including
military observers and civilian police.
The $389 million supplemental request came on top of over $500 million in
humanitarian relief provided by the United States to Darfur in FY2005 and roughly
$280 million available from FY2006 appropriations. Major elements of the
supplemental request included:
! $66 million for immediate, life-saving needs of victims of the Darfur
crisis, including health care, access to water and sanitation, and
shelter;
! $150 million for additional food assistance, an amount that would
meet about 50% of food needs in Darfur and eastern Chad, up from
the roughly 27% level currently;
! $11.7 million in refugee relief in Darfur and eastern Chad;
! $123 million in support of the African Union Mission in Sudan
(AMIS). Although AMIS funding was not requested by the
Administration in the regular FY2006 appropriation cycle, in late
2005 as Congress concluded debate on the Foreign Operations
spending measure, Secretary of State Rice asked that funds be added
to the final bill. While no additional funds were approved, through
reallocations and reprogrammings from other peacekeeping funds,
the State Department had made $33 million available for AMIS in
FY2006 at the time of the supplemental request. That amount
increased to $57 million by June 2006; and
! $38.1 million to support the transition of the current African Union
peacekeeping mission in Darfur to a possible U.N. peacekeeping
operation.

CRS-55
Table 14. Sudan Supplemental
($s — millions)
FY2006
FY2006
FY2006
FY2006
FY2006
Activity
Regular
Supp.
Supp.
Supp.
Supp.
(appropriation account)a
Estimate
Request
House
Senate
Enacted
Darfur:
Humanitarian relief (IDFA)
$40.0
$66.3
$66.3
$66.3
$66.3
Refugees/conflict victims in Darfur &
$64.0
$11.7
$11.7
$11.7
$11.7
Chad (MRA)
PL480 food aid
$167.0
$150.0
$150.0
$150.0
$150.0
African Union peacekeeping mission
$13.0
$123.0
$173.0
$173.0
$173.0
(PKO)
U.N. peacekeeping mission in Darfur
$0.0
$38.1
$98.1
$98.1
$98.1
(CIPA)
Subtotal, Darfur
$284.0
$389.1
$499.1
$499.1
$499.1
Southern Sudan:
Refugees returning to southern Sudan
$22.0
$12.3
$12.3
$12.3
$12.3
PL480 food aid
$73.3
$75.0
$75.0
$75.0
$75.0
U.N. peacekeeping mission in southern
$247.0
$31.7
$31.7
$31.7
$31.7
Sudan (CIPA)
USAID mission in Juba (OE)
$0.0
$6.0
$0.0
$6.0
b
Subtotal, Southern Sudan
$342.3
$125.0
$119.0
$125.0
$119.0
Total, Sudan
$626.3
$514.1
$618.1
$624.1
$618.1
Source: Department of State and CRS calculations based on H.Rept. 109-388, S.Rept. 109-230, and
H.Rept. 109-494, with modifications to reflect House and Senate floor amendments.
Note: Data in this table reflect ongoing funding for programs the same as or similar to those requested
in the FY2006 supplemental. The Total line does not represent total aid or mission operations for
Sudan.
a. See Table 11 for listing of appropriation account acronyms.
b. USAID mission security funds are included in a total appropriation of $101 million available for
missions in Iraq, Afghanistan, and Sudan.
Congressional Action. The conference agreement on H.R. 4939 provides
$499 million for Darfur, $110 million above the request. As passed in both the
House and Senate, the enacted bill adds $50 million in support of the African Union
peacekeeping mission and $60 million for the CIPA account to assist in the transition
from the current African Union peacekeeping mission in Darfur to a U.N. mission.
The House increase for AMIS operations came on an amendment by Representative
Capuano (approved 213-208). In the Senate, an amendment by Senator Menendez
added $60 million to the requested level for a U.N. peacekeeping mission in Darfur,
an amount offset by a reduction in State Department operation costs in Iraq.

CRS-56
The North-South Peace Agreement and Aid for Non-Darfur Sudan.
On January 9, 2005, the government of Sudan and the Sudan People’s Liberation
Movement (SPLM), after two and half years of negotiations, signed the Sudan
Comprehensive Peace Agreement at a ceremony in Nairobi, Kenya. The signing of
this agreement effectively ended the 21-year old civil war and triggered a six-year
Interim Period. At the end of the Interim Period, southern Sudanese will hold a
referendum to decide their political future. Full and timely implementation of the
peace agreement, however, has been slow, raising concerns about potential conflict
between the two sides. Some important provisions of the agreement have not been
implemented, including commissions, withdrawal of troops, transfer of funds to
South Sudan, and the marginalization of some ministries by the National Congress
Party. Moreover, on July 30, 2005, First Vice President and Chairman of the Sudan
People’s Liberation Movement (SPLM), Dr. John Garang, was killed in a plane crash
in southern Sudan (discussed below). His death triggered violence between
government security forces and southerners in Khartoum and Juba. More than 100
people were killed. In early August 2005, the SPLM Leadership Council appointed
Salva Kiir as Chairman of the SPLM and First Vice President of Sudan. The United
Nations has deployed an estimated 5,500 peacekeeping troops in support of the peace
agreement and the number is expected to increase to 10,715. The United States has
been a key player in the negotiations process and remains active.
The FY2006 supplemental request included $125 million for southern Sudan
and other areas of the country outside of Darfur:
! $12.3 million to assist in a higher-than-expected level of the return
to southern Sudan of refugees and internally displaced persons. This
would be on top of $28 million planned in the FY2007 refugee aid
budget proposal when another 150,000 refugees are expected to
return.
! $75 million in food aid to support about three million internally
displaced persons and returning refugees throughout Sudan. As in
the case of Darfur, the supplemental package was expected to meet
50% of the food aid needs, compared to existing levels that will
reach only 29% of the target.
! $6 million for opening USAID offices in the capital of South Sudan,
Juba, and Khartoum.
! $31.7 million to increase U.S. support for the U.N. peacekeeping
mission in Sudan (UNMIS). Separately, the Administration seeks
$442 million for UNMIS in its FY2007 regular appropriation
request.
Congressional Action. As agreed in conference, H.R. 4939 includes full
funding for the aid and peacekeeping portions of the southern Sudan supplemental
request ($119 million). In earlier action, the House and Senate had approved these
same funding levels. Amounts for the remaining element — $6 million for USAID
offices in Juba and Khartoum — is less certain. Conferees provide $101 million for
the combined USAID mission operations in Iraq, Afghanistan, and Sudan, down

CRS-57
from a combined request of $141 million. It is possible that the Sudan mission will
not receive the full $6 million requested.
Pakistan
On October 8, 2005, an earthquake of magnitude 7.6 struck Pakistan, India, and
Afghanistan. Over 73,000 died in Pakistan and 2.8 million became homeless. At a
donors conference in November, the United States pledged a total of $510 million for
earthquake relief and reconstruction, of which $300 million would come from U.S.
economic and humanitarian assistance programs.67
Without additional funds added to the regular FY2006 Foreign Operations
spending measure for earthquake relief, USAID has been drawing on contingency
funds and reallocating existing appropriations to meet emergency requirements for
earthquake victims. The $126.3 million supplemental proposal would replenish
some of these diverted funds, plus provide resources for continuing reconstruction
efforts. The Administration said because of the sizable drawdown — estimated to
be $70 million — from the International Disaster and Famine Assistance account —
the ability of the United States to respond to other global disasters in FY2006 would
be seriously undermined. The $70 million allocation for Pakistan earthquake relief
represented about 17% of USAID’s worldwide emergency disaster budget.
Table 15. Pakistan Supplemental
($s — millions)
FY2006
FY2006
FY2006
FY2006
FY2006
FY07
Appropriation
FY2005
Regular
Supp.
Supp.
Supp.
Supp.
Reg.
Account
Actual
Enacted Request
House
Senate
Enacted
Req.
Int’l Disaster & Famine
—
—
$70.0
$70.0
$70.0
$70.0
—
Assistance
Economic Support Fund
$297.6
$297.0
$40.5
$40.5
$40.5
$40.5 $350.0
Child Survival & Health
$21.0
$26.9
$5.3
$5.3
$5.3
$5.3
$21.7
Development Assistance
$29.0
$30.1
$10.5
$10.5
$10.5
$10.5
$29.0
Total
$347.6
$354.0
$126.3
$126.3
$126.3
$126.3 $400.7
Source: Department of State and CRS calculations based on H.Rept. 109-388, S.Rept. 109-230, and
H.Rept. 109-494, with modifications to reflect House and Senate floor amendments.
Note: Data in this table reflect ongoing and FY2007 proposed funding for programs the same as or
similar to those requested in the FY2006 supplemental. The TOTAL line does not represent total aid
for Pakistan.
67 The balance of the pledge was made up of Defense Department in-kind support for relief
operations ($110 million) and assumed U.S. private donations ($100 million).

CRS-58
Congressional Action. As enacted, H.R. 4939 fully funds the request for
Pakistan earthquake assistance in order to reimburse funds that were previously
reprogrammed to meet emergency needs.
Other Foreign Assistance Proposals
Beyond the proposed aid packages for Iraq, Iran, Sudan, and Pakistan, the
Administration also sought several other foreign assistance items:
! $13.8 million in refugee assistance for the return and reintegration
of Liberian refugees and internally displaced persons. With
elections in November 2005 and the inauguration of a new
government in January 2006, the pace of voluntary refugee returns
has accelerated, with 120,000 expected to return in 2006. The
Administration said that the $13.8 million supplemental would
provide the U.S. “fair share” contribution to U.N. High
Commissioner for Refugees and International Committee for the
Red Cross appeals.
! $125 million in additional PL480 food assistance for FY2006,
primarily to address emerging crises in East and Central Africa.
! $10 million from the refugee account for the World Food Program
in order to avert potential pipeline breaks in refugee feeding
programs in Africa.
Congressional Action. The supplemental measure, as enacted, provides the
full request of $125 million for food aid in East and Central Africa, increases the
World Food Program amount to $12 million, and adds an additional $50 million for
Liberia, for a total appropriation of $63.8 million.
House- and Senate-passed bills further addressed issues not included in the
Administration’s international request. One such item concerned existing conditions
placed on assistance to the Palestinian Authority. During House Committee markup,
the panel adopted an amendment by Representative Kolbe barring any aid to the
Palestinian Authority or any successor entity until the Secretary of State certifies that
such entity is committed to the principles of nonviolence, the recognition of Israel,
and the acceptance of previous agreements and obligations, including the peace
Roadmap. The Senate measure included a similar provision, but added a Presidential
waiver of these restrictions based on national security interests. The enacted measure
includes conditions on aid to the Palestinian Authority, plus a waiver similar to that
added by the Senate.
The enacted bill further includes a House-passed amendment that bans the
obligation of existing appropriations for the West Bank and Gaza until the Secretary,
in consultation with the Committee, reviews current aid programs and provides to
Congress a revised plan of assistance. The Secretary’s revised plan must ensure that
U.S. aid is not provided to or through any individuals or organizations engaged in
terrorist activities.

CRS-59
During floor debate on H.R. 4939, the House adopted (250-172) an amendment
submitted by Representative Burton that redirected $26.3 million in funds requested
for Iraq prison construction and protection of judges to support additional counter-
narcotics requirements in Colombia. Specifically, the $26.3 million would fund the
purchase and operations costs of three D-3 aircraft for use by the Colombian Navy
in interdiction and support missions. The Senate bill did not provide the Colombia
aircraft funding. As enacted, H.R. 4939 includes $13 million for maritime
surveillance aircraft for Colombia.
On other Colombia-related matters, the Senate-passed bill provided $2.5 million
in refugee assistance for Colombia and, as a result of an amendment by Senator
Leahy, allocated $3.3 million for the demobilization process in Colombia. The
demobilization funds were a redirection of money proposed for prison construction
in Iraq. Conferees include the $3.3 million demobilization funds for Colombia but
do not mention refugee assistance.
For other items not requested or included in the House bill, the Senate measure
provided $42.5 million for refugee assistance in Somalia, the Horn of Africa, the
Congo, North Caucasus, North Asia, and Burma. The conference agreement pares
this total to $22.5 million, with an allocation of $5 million for Burma and the balance
divided among “other” requirements. Other Senate-passed items included:
! Haiti — $35 million in ESF for economic development ($10
million), police reform ($10 million), and judicial and legal reforms
($15 million) and $5 million in CSH for critical health needs.
Conferees approved half of the Senate-approved level for a total of
$20 million for Haiti from ESF and CSH accounts.
! Congo — $5 million to support upcoming elections and $8.2 million
for training, equipment, and other assistance for security forces that
are supporting peacekeeping operations. The conference agreement
provides $2.5 million for election support and $5 million in
peacekeeping funds.
! Jordan — $100 million for economic and social reforms, including
infrastructure, training and education. Conferees set economic aid
for Jordan at $50 million.
! West Africa and the Horn of Africa drought relief — $35 million.
The conference agreement provides $25 million.
! Guatemala — $12 million to assist victims of Hurricane Stan. The
enacted bill includes $6 million.
Conferees rejected a Senate-passed rescission proposal — to cancel $47 million
of previously appropriated ESF money for Egypt — an amount that would come from
the cash transfer portion of annual U.S. assistance to Cairo. The conference
agreement, however, includes a total of $44 million in rescissions from peacekeeping
($7 million) and the Export-Import Bank ($37 million).

CRS-60
Hurricane Recovery and Disaster Supplemental
Overview
On February 16, 2006, the President proposed an FY2006 emergency
supplemental appropriations of $19.8 billion for continuing federal recovery and
reconstruction activities in response to the 2005 Gulf Coast hurricanes, primarily
Hurricane Katrina. These appropriations would have been in addition to the
supplemental appropriations already enacted in response to the 2005 hurricanes,
including two FY2005 supplementals — $10.5 billion from P.L. 109-61 (September
2, 2005) and $51.8 billion from P.L. 109-62 (September 8, 2005).
In addition, Division B of P.L. 109-148, the Department of Defense, Emergency
Supplemental Appropriations to Address Hurricanes in the Gulf of Mexico, and
Pandemic Influenza Act, 2006 (December 30, 2005), provided $28.6 billion for
hurricane relief, of which $23.4 billion was offset by a reallocation from the
Department of Homeland Security Disaster Relief Fund (DRF). Also, the President
has estimated that $8 billion has been approved for tax relief for persons of the Gulf
Coast. According to the Administration, existing funding was estimated to allow the
continuation of hurricane recovery activities through March 2006.68
Of the $19.8 billion requested, most of the funds were proposed for 11
departments and agencies, as shown in Table 16. Under the request, nearly half the
funds — $9.9 billion — were designated for the Department of Homeland Security
(DHS), and almost all of the DHS funds would have been allocated for the Federal
Emergency Management Agency (FEMA). The Department of Housing and Urban
Development would have received $4.4 billion, most of which would have been
allocated for community planning and development under the Community
Development Block Grant (CDBG).
The Department of Defense and the Army Corps of Engineers would have
received $3.3 billion ($5.5 billion under the April 25, 2006 revision to the request),
with these funds primarily to be used for flood control and coastal emergencies,
procurement, and construction. The Small Business Administration (SBA) would
have received $1.3 billion for loans to homeowners, renters, and businesses. The
Department of Veterans Affairs would have received $600 million to replace the VA
medical center in New Orleans. The Department of the Interior would have received
$216 million, primarily for the Fish and Wildlife Service.
On April 25, 2006, the Administration revised its supplemental request. The
revision increased funding for the Army Corps of Engineers by $2.2 billion to assist
in post-Katrina recovery efforts; this amount was offset by a $2.2 billion reduction
68 For an overview of supplemental appropriations in response to the 2005 hurricanes, see
CRS Report RS22239, Emergency Supplemental Appropriations for Hurricane Katrina
Relief, by Keith Bea. For a summary of emergency supplemental funding in prior years,
please see CRS Report RL33226, Emergency Supplemental Appropriations Legislation for
Disaster Assistance: Summary Data FY1989 to FY2005, by Justin Murray.

CRS-61
in funding requested for FEMA Disaster Relief Fund.69 Also on April 25, the
Administration strongly objected to most funding increases proposed by the Senate
Committee on Appropriations in its version of the FY2006 supplemental bill, and
promised that the President would veto any bill providing more than $92.2 billion,
exclusive of supplemental funds for pandemic influenza preparedness.70 In
particular, it singled out funds provided by the bill as reported by the Senate
Committee on Appropriations that were in excess of the amount requested by the
President for FEMA, CDBG, highways and railroad track relocation, agriculture, and
the National Oceanic and Atmospheric Administration (NOAA). It did not
specifically object to additional education funding that is provided in the Senate-
reported bill, and it agreed to additional funding for pandemic influenza preparedness
and prevention.
Table 16. Summary of FY2006 Supplemental for Hurricane
Recovery and Disaster Assistance
($s — millions)
Supp.
Supp.
Supp.
Supp.
Department or Agency
Request
House
Senate
Conf.
Department of Agriculture
$55.0
$75.0
$499.9
$152.5
National Oceanic and Atmospheric
$32.8
$11.8
$1,167.0
$150.0
Administration
Small Business Administration
$1,254.0
$1,254.0
$1,254.0
$542.0
Department of Defense
$1,809.4
$1,347.0
$1,743.8a
$1,487.7
Army Corps of Engineers
$1,460.0
$1,460.0
$4,001.5
$3,685.9
Department of Homeland Security
$9,875.0
$9,905.3
$11,082.9
$6,662.0
Department of the Interior
$216.0
$216.0
$296.0
$265.0
Department of Education
$0.0
$0.0
$881.5
$285.0
Department of Veterans Affairs
$600.0
$550.0
$623.0
$585.9
Department of Transportation
$0.0
$0.0
$1,494.0
$702.4
Department of Transportation rescission
$0.0
$0.0
$0.0
($702.4)
Department of Housing and Urban
$4,402.0
$4,200.0
$5,402.2
$5,200.0
Development
Other Departments and Agenciesb
$59.7
$87.0
$409.7
$322.5
Total, Title II Hurricane Recovery
$19,763.9
$19,106.1
$28,855.5
$19,338.5
Agricultural Disaster Assistance
$0.0
$0.0
$3,944.0
$500.0
69 For details, please see:
[http://www.whitehouse.gov/omb/budget/amendments/supplemental_4_25_06.pdf].
70 For details, please see:
[http://www.whitehouse.gov/omb/budget/amendments/supplemental_11_01_05.pdf].

CRS-62
Supp.
Supp.
Supp.
Supp.
Department or Agency
Request
House
Senate
Conf.
Pandemic Influenza Preparedness
$0.0
$0.0
$2,589.0
$2,300.0
Border Security
$0.0
$0.0
$1,900.0
$1,900.0
Capitol Tunnels
$0.0
$0.0
$27.6
$27.6
Mine Safety
$0.0
$0.0
$35.6
$35.6
Low Income Home Energy Assistance
$0.0
$750.0
$0.0
$0.0
Hawaii Waters
$0.0
$0.0
$1.0
$0.0
Veterans Medical Services
$0.0
$0.0
$430.0
$0.0
Drought Assistance
$0.0
$0.0
$12.5
$0.0
Port Security Enhancements
$0.0
$0.0
$648.1
$0.0
Total, Other Activities
$0.0
$750.0
$9,587.8
$4,763.2
Source: CRS calculations based on H.Rept. 109-494 and S.Rept. 109-230, adjusted for Senate floor
amendments.
Note: Totals may not add because of rounding. On April 25, 2006, the Administration revised its
request by increasing the amount for the Army Corps of Engineers by $2.2 billion and decreasing the
request for FEMA at the Department of Homeland Security by the same amount. In a separate
statement, it provided support for supplemental funding for pandemic influenza preparedness. On
May 18, 2006, the Administration revised its request again, by requesting $1.9 billion for border
security, primarily funded through Defense and Homeland Security, and decreasing Defense, primarily
procurement, by the same amount. The table shows only the initial request and not the revisions.
a. The Senate adopted an amendment providing $1.9 billion for border security, to be offset by an
unspecified cut of $1.9 billion in DOD funds for both war costs (Title I) and hurricane recovery
(Title II). The Administration would determine the distribution of the cut among programs in
both titles. Consequently, the $1.74 billion Senate Title II amount for DOD could fall
somewhere between $0.0 and $1.74 billion, depending on how the reductions are allocated.
b. See Table 28 for a listing of other departments and agencies.
Department of Agriculture
The President’s FY2006 supplemental request for the Department of Agriculture
(USDA) was $55 million, as shown in Table 17. The FY2006 conference agreement
includes $652.4 million in emergency disaster assistance for all activities and
programs administered by USDA. The Senate bill would have provided $4.4 billion,
and the House bill, $75 million.

CRS-63
Table 17. FY2006 Disaster Supplemental for Agriculture
($s — millions)
Supp.
Supp.
Supp.
Supp.
USDA Account or Agency
Request
House
Senate
Conference
Executive Operations: National Finance
$25.0
$25.0
$25.0
$25.0
Center in New Orleans
Office of Inspector General: Audits of
$0.0
$0.0
$0.4
$0.4
Hurricane Activities
Agricultural Research Service: Research
$20.0
$20.0
$35.6
$30.0
facilities damaged by hurricanes
Farm Service Agency: Salaries
$0.0
$0.0
$5.0
$0.0
Emergency Conservation Program
$0.0
$0.0
$32.5
$0.0
Natural Resources Conservation
Service: Emergency Watershed
$10.0
$10.0
$165.0
$51.0
Protection
Rural Development: Rural infrastructure
$0.0
$0.0
$186.4
$26.0
repairs, housing assistance
Forest Service
$0.0
$20.0
$50.0
$20.0
USDA Subtotal, Title II
$55.0
$75.0
$499.9
$152.4
Title III: Commodity Credit
Corporation: Emergency Agricultural
$0.0
$0.0
$3,944.0
$500.0
Disaster Aid
USDA Total, Titles II and III
$55.0
$75.0
$4,443.9
$652.4
Source: CRS calculations based on H.Rept. 109-494 and S.Rept. 109-230, adjusted for Senate floor
amendments.
Congressional Action. The FY2006 conference agreement includes $652.4
million to USDA for various forms of disaster aid, virtually all in response to the
2005 Gulf State hurricanes. The USDA emergency disaster assistance is provided
in two separate titles of the bill. The $152.4 million in Title II includes all of the
Administration’s request for restoring and rebuilding damaged USDA facilities, as
well as additional funding to help farmers and rural areas in the 2005 hurricane-
affected states repair and rehabilitate damaged farmland, watersheds, and rural
infrastructure. The $500 million in Title III provides direct assistance to various
agricultural producers in the 2005 hurricane states, including growers of livestock
($140 million); trees and vines ($135 million); fruits, vegetables, and nursery
products ($95 million); sugar, including processors ($80.4 million); dairy ($17
million); cottonseed, including processors ($15 million); and aquaculture ($8
million). None of the assistance in Title III was requested by the Administration or
provided in the House bill.
The Senate bill was significantly higher than the House version because of an
adopted amendment which would have provided $3.9 billion in farm commodity loss

CRS-64
assistance (Title III of the Senate bill). Included in the Senate total was an estimated
$1 billion in crop loss assistance for all regions of the country, not just the hurricane
states, and $1.5 billion in direct payments to certain crop producers to compensate
for high energy costs. The conference agreement deleted both of these Senate
provisions and limited the scope of Title III assistance to producers in the Southern
2005 hurricane states. During the debate on the supplemental, the Administration
objected to any additional funds for agricultural assistance outside of the hurricane
states. 71
National Oceanic and Atmospheric Administration72
The President’s FY2006 supplemental request included $32.8 million for the
National Oceanic and Atmospheric Administration (NOAA), as shown in Table 18.
The FY2006 conference agreement includes $150.0 million for NOAA activities.
Table 18. FY2006 Hurricane Supplemental for the National
Oceanic and Atmospheric Administration
($s — millions)
National Oceanic and Atmospheric
Supp.
Supp.
Supp.
Supp.
Administration (NOAA) Activity
Request
House
Senate
Conference
Operations, Research, and Facilities
$21.0
$0.0
$1,135.0
$118.0
Procurement, Acquisition, and
$11.8
$11.8
$32.0
$32.0
Construction
NOAA Total
$32.8
$11.8
$1,167.0
$150.0
Source: CRS calculations based on H.Rept. 109-494 and S.Rept. 109-230, adjusted for Senate floor
amendments.
The President’s FY2006 supplemental request included $32.8 million for the
Department of Commerce for two types of activities at the National Oceanic and
Atmospheric Administration (NOAA) — $21.0 million for Operations, Research,
and Facilities (ORF) activities, and $11.8 million for Procurement, Acquisition, and
Construction (PAC) activities. The ORF amount would have been used for an
assessment of fishery resources, mapping of fishing grounds for debris removal,
rehabilitation of oyster beds, and promotion of economically sustainable Gulf Coast
fisheries. The PAC amount would have been used for the repair and reconstruction
of NOAA’s National Marine Fisheries Service (NMFS) science center at Pascagoula,
MS, which provides scientific support for Gulf Coast fishery management.73
71 For more information on USDA disaster assistance, please see CRS Report RS21212,
Agricultural Disaster Assistance, by Ralph M. Chite.
72 Prepared by Wayne A. Morrissey, Information Research Specialist.
73 For additional information on the funding for NOAA, please see CRS Report RS22410,
The National Oceanic and Atmospheric Administration (NOAA) Budget for FY2007:
President’s Request, Congressional Appropriations, and Related Issues, by Wayne A.
(continued...)

CRS-65
Congressional Action. The House version of the supplemental fully funded
the PAC request of $11.8 million for the repair and reconstruction of a damaged
NOAA science center, but did not agree to the ORF request of $21.0 million
proposed for the assessment and recovery of Gulf Coast fisheries. The Senate
version provided an additional $1.1 billion for the ORF recovery and restoration of
Gulf Coast fisheries operations, and included $20 million to assist “shellfishermen”
in New England coastal communities affected by the red tide outbreak in 2005. The
Senate Committee version would have increased the PAC amount for the science
center to $20.0 million, and provided an additional $11.8 million to procure an
aircraft equipped with hurricane damage assessment imaging capabilities. A Senate
floor amendment disallowed $15 million for NMFS that was recommended by the
Senate Committee for the promotion of seafood. In its April 25, 2006 statement of
administration policy, the Administration specifically objected to the additional funds
for NOAA that are provided in the bill as reported by the Senate Committee on
Appropriations.
The FY2006 conference agreement includes $150 million for NOAA. These
funds provide $118 million for ORF activities, including $20 million for mapping
and scanning for debris removal in the Gulf; $2 million for Physical Oceanographic
Real-Time Systems (PORTS) along the Gulf of Mexico; $1 million to repair and
replace gage systems in the northern Gulf; $90 million for NMFS for oyster, shrimp,
and Gulf fisheries recovery; and $5 million for fishermen to recover from fisheries
disasters declared in 2005. In addition, the agreement provides $32 million for
NOAA PAC. The conferees approved a transfer of $38 million from USDA to assist
NOAA with re-seeding, rehabilitation, and restoration of damaged oyster reefs.
Small Business Administration74
The President’s FY2006 supplemental request for the Small Business
Administration (SBA) was $1.25 billion, as shown in Table 19. The FY2006
conference agreement includes $542.0 million for SBA activities.
Table 19. FY2006 Hurricane Supplemental for Small Business
($s — millions)
Supp.
Supp.
Supp.
Supp.
SBA Account
Request
House
Senate
Conference
Disaster Loans Program a
$1,254.0
$1,254.0
$1,254.0
$542.0
Source: CRS calculations based on H.Rept. 109-494 and S.Rept. 109-230, adjusted for Senate floor
amendments.
a. The FY2006 conference agreement does not include a House provision that would have transferred
$712 million of the amount provided for SBA Disaster Loans Program to the FEMA DRF for
reimbursement of funds previously transferred from FEMA to the SBA.
73 (...continued)
Morrissey.
74 Prepared by Eric Weiss, Analyst in Financial Institutions.

CRS-66
Disaster Loans Program. The FY2006 conference agreement includes $542
million for disaster loans to homeowners, renters, and businesses including $190
million administrative funds to make loans for recovery costs related to the 2005
hurricanes. The conferees dropped a provision that had been approved by the House
and Senate that would have transferred $712 million to reimburse FEMA DRF. As
of the middle of June 2006, the SBA had received 419,000 applications from
individuals and businesses for disaster loans. It had approved more than 151,000 of
these valued at over $9 billion. The SBA had made disbursements totaling $1.5
billion on 82,000 loans.
Congressional Action. The FY2006 conference agreement eliminated the
proposal of $712 million for FEMA DRF reimbursement and reduced the amount for
disaster loans by that amount. The House and Senate versions of the supplemental
would have provided the $1.254 billion requested by the President. The Senate
agreed to several floor amendments regarding the expenditure of funds, eligibility
provisions, waivers, and reporting requirements on expenditures. In addition, the
Senate bill added a technical amendment that would have transferred $1 million to
the University of Nevada Las Vegas to study and run an international air show.
Defense Department Supplemental for Repairs, Rebuilding,
and Help for Shipbuilders 75
The Administration’s FY2006 supplemental request for the Department of
Defense (DOD) was $1.8 billion, as shown in Table 20. This amount was in
addition to the $7.7 billion that DOD has received in two previous hurricane relief
supplementals and the FY2006 DOD Appropriations Act reallocation.76
Table 20. FY2006 Hurricane Supplemental for Defense
($s — millions)
Supp.
Supp.
Supp.
Supp.
Defense Activity
Request
House
Senate
Conference
Military Personnel
$69.0
$69.0
$69.0
$69.0
Operations and Maintenance (O&M)
$123.6
$123.6
$123.6
$123.6
Procurement & Nat’l Defense Sealift
Fund a
$1,137.4
$887.4
$1,137.4
$887.4
Research, Development, Test, and
$19.0
$19.0
$19.0
$19.0
Evaluation
Revolving and Management Funds b
$21.7
$21.7
$21.7
$21.7
75 Prepared by Amy Belasco. Thomas Nicola and Henry Cohen, American Law Division,
and Rawle King and Baird Webel, Government and Finance Division, contributed to the
shipbuilding section. Daniel Else, Foreign Affairs, Defense, and Trade Division,
contributed to the military construction section.
76 DOD received $1.9 billion in P.L.109-61 and P.L.109-62 and $5.8 billion in the
reallocation (P.L. 109-148) for a total of $7.7 billion.

CRS-67
Supp.
Supp.
Supp.
Supp.
Defense Activity
Request
House
Senate
Conference
Other Defense Programs
$33.9
$33.9
$34.2
$34.2
Military Construction c
$404.8
$190.4
$338.9
$332.7
Defense Total
$1,809.4
$1,345.0
$1,743.8 c
$1,487.6
General Provision: reducing DOD
war & hurricane funds d
-.-
-.-
($1,900.0)c
$0.00
Source: CRS calculations based on S.Rept. 109-230 and Senate amendments.
Note: On May 18, 2006, the Administration revised its proposal by requesting $1.9 billion for border
security, primarily funded through Defense and Homeland Security, and reducing Defense, primarily
procurement, by an equal amount.
a. Includes $1.02 billion in procurement and $11 million in National Defense Sealift funds primarily
to reimburse shipbuilders for higher costs due to “business disruption.”
b. Includes funds to repair and rebuild commissaries.
c. Includes rescissions of $169.5 million.
d. The Senate adopted an amendment providing $1.9 billion for border security, to be offset by an
unspecified cut of $1.9 billion in DOD funds for both war costs (title I) and hurricane
rehabilitation (title II). The Administration would determine the distribution of the cut among
programs in both titles. Consequently, the $1.74 billion Senate total for hurricane damage
programs could fall somewhere in the range of $0 and $1.74 billion, depending on how the
reductions would be allocated.
Like the previous hurricane-related supplementals, this request would direct
additional funds to repair and replace equipment, rebuild facilities and infrastructure
on bases damaged by the hurricanes, provide benefits to displaced military personnel,
and give the Navy more money to pay estimated increased shipbuilding costs
associated with labor delays and disruption of operations at damaged shipyards in
New Orleans and Pascagoula. The request did not include more funds to activate
reservists or support active-duty personnel who were deployed to provide initial
rescue and recovery efforts, or for evacuation of DOD personnel.77
The main elements in the supplemental request were:
! $1.02 billion for higher shipbuilding costs in addition to the $1.7
billion already provided;
! $115 million for military benefits, including higher Basic Allowance
for Housing for military personnel in the affected areas, health care
support, commissary rebuilding, and personal claims;
! $202 million for additional repair and replacement of equipment in
addition to the $550 million already received;
77 See, Department of Defense FY2006 Hurricane Katrina & Rita Budget Reallocation
Request and Rescissions, November 2005; CRS Report RL33197, Reallocation of Hurricane
Katrina Emergency Appropriations: Defense and Other Issues coordinated by Amy Belasco.
See also Table 2C in CRS Report RL32924, Defense: FY2006 Authorization and
Appropriations, by Stephen Daggett for an appropriation account breakdown of DOD’s
reallocation request.

CRS-68
! $63 million to restore facilities in addition to $660 million in
previously appropriated funds; and
! $405 million for military construction in addition to the $1.4 billion
already received.78
Congressional Action. The conference agreement proposes a total of $1.5
billion for DOD for hurricane-related damages and basically endorses DOD’s request
with one major exception: a $250 million cut in the $1 billion requested by DOD to
reimburse shipbuilders to replace damaged equipment and pay higher labor and
overhead costs because of delays in shipbuilding schedules, an issue that proved to
be controversial. The conferees also propose to use rescinded funds to pay for
Katrina projects identified in last year’s DOD bill.
Although the conference bill rejects the Senate proposal in Section 2303 (see
below) that would have broadened the Navy’s liability for higher shipbuilding costs
— some of which may be covered by Northrop Grumman’s insurance policies —
conferees provide that not less than $140 million of the $775 million appropriated
would be for infrastructure improvements at Gulf Coast shipyards damaged by the
hurricanes that have existing Navy contracts.79 The conference agreement adopts the
lower funding level for shipbuilding, as proposed by the House, presumably
reflecting scepticism about the Navy’s estimates voiced by House appropriators. The
proposal would offset the amount that Northrop Grumman believes it may not
receive from its insurer for higher shipbuilding costs due to business interruption but
may do so without reversing current DOD acquisition regulations.80
Previously, the House bill provided a total of $1.3 billion for hurricane-related
damages to DOD facilities, a $520 million reduction to the $1.8 billion request. The
House cut reflected a $250 million cut to DOD’s $1 billion request to reimburse
shipbuilders for higher costs and a $210 million cut to military construction projects
proposed by the services. The SAC provided $1.7 billion, the full amount to
reimburse shipbuilders and cutting $65 million from military construction projects.
Both houses approved the DOD request for military personnel, O&M, and
procurement funds to pay for hurricane-related damages and costs.
The Senate provided $1.7 billion — less some unspecified portion of the $1.9
billion cut to defense funds to be distributed by the Administration to pay for an
additional $1.9 billion provided for border security. As passed, the bill provided the
full amount to reimburse shipbuilders and cuts $65 million from military construction
projects. In floor action, the Senate rejected an amendment proposed by Senator
Coburn to delete Section 2303, which could broaden the Navy’s liability for higher
shipbuilding costs (see below). Both houses approved the DOD request for military
78 CRS calculations based on DOD, FY2006 Supplemental Request for Hurricane Katrina
and Other Hurricanes of the 2005 Season, February 2006, passim,
[http://www.dod.mil/comptroller/defbudget/fy2007/FY06-Hurricane-Supp.pdf].
79 Section 2303, H.R. 4939 as reported in H.Rept. 109-494, p. 36.
80 See CQ Weekly, “Katrina Leaves Military Shipbuilder Adrift,” by Anne Plummer, June
6, 2006.

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personnel, O&M, and procurement funds to pay for hurricane-related damages and
costs.
Who Should Pay for Higher Costs Due to Delays in Shipbuilding.
In the earlier reallocation of Katrina funds (P.L. 109-148), Congress provided $1.7
billion to reimburse shipbuilders (primarily Northrop-Grumman) for estimated
increased costs for ships under construction at Ingalls Shipyard in Pascagoula,
Mississippi, and Avondale shipyard in New Orleans. At the time, however, House
and Senate Appropriations Committees raised concerns about Navy reimbursement
plans primarily because of the difficulties in segregating the costs that should be
borne by the contractor’s insurance vs. the costs to be borne by the government. The
contractor carries insurance to protect its profits against “business interruption” and
therefore its insurance company may be liable for higher costs incurred because of
downtime and lower productivity of the shipyard workforce, additional overhead
charges and higher inflation costs due to delays. All of these circumstances —
associated with the damage to the two shipyards — could cut into contractor profits
if the government did not reimburse related costs. The FY2006 supplemental
included an additional $1 billion for higher costs for a total of $2.7 billion.
Last year, the House and Senate Appropriations Committees raised concerns
about the Navy’s reimbursement plans primarily because of the difficulties in
segregating the costs that should be borne by the contractor’s insurance vs. the costs
to be borne by the government. According to the Navy’s original estimate, from
$1.1 billion to $1.5 billion of the estimated higher costs could be due to business
disruption costs, some of which could be covered by insurance claims.

The contractor carries insurance to protect its profits against “business
disruption,” and therefore its insurance company may be liable for higher
shipbuilding costs incurred because of downtime, lower productivity, additional
overhead charges, and higher inflation costs due to delays. All of these
circumstances — associated with the damage to the two shipyards — could cut into
contractor profits if the government did not reimburse those costs.
To ensure oversight, the Appropriations Committees last year required that the
Navy (or Army) Secretary submit a report certifying that the higher shipbuilding
costs are:
! required to be incurred for hurricane relief;
! not subject to reimbursement by any third party (e.g., FEMA or
private insurer); and
! directly allocable to the program for which funds are being
provided.81
81 H.Rept. 109-359 in Congressional Record, December 18, 2005, pp. H. 12630, H12631.
See CRS Report RL33197, Reallocation of Hurrican Katrina Emergency Appropriations:
Defense and Other Issues, coordinated by Amy Belasco, for a complete discussion of this
oversight issue.

CRS-70
Although there does not appear to be any standard definition of what is required for
a defense official to certify to these conditions, the following questions might need
to be answered to demonstrate that the Navy is turning to the government as a last
resort to reimburse these higher costs.
(1) Has the contractor submitted and received rejections from insurers for its claims
for reimbursement for business interruption? If so, has the contractor challenged the
rejection in court and what has been the outcome of the challenge?
(2) What types of expenses does “business interruption” insurance cover and what
types of expenses does it not cover? How do these criteria relate to the expenses
incurred at the shipyard?
(3) Can the Navy demonstrate that delays incurred are associated with Gulf Coast
hurricanes rather than other problems with a shipbuilding program by showing work
plans before and after the hurricane?
(4) Can the Navy demonstrate that the expenses were unavoidable, i.e. that the
contractor has made maximum efforts to avoid delays and disruption by
subcontracting work to other locations or relocating personnel?
Congress may want to clarify the standards required for the Navy to certify that
such additional expenses were unavoidable, directly associated with the Gulf Coast
hurricanes , and not payable by a third party and apply such criteria both to the $1
billion in this new request and the $1.7 billion appropriated in the earlier reallocation
(P.L.109-148). Congress may also want to ask the Navy to refine its initial estimate
— made in the third week of September 2005 — only three weeks after Hurricane
Katrina struck. The $1 billion supplemental request, together with the $1.7 billion
already enacted, is identical to that original estimate.82
Congressional Action. As noted above, the conference agreement provides
$775 million (House level), rather than the $1.02 billion requested and recommended
by the Senate for the Navy to reimburse its contractors for higher costs associated
with the hurricane damage at Ingalls, MS, and Avondale, LA, shipyards. Conferees
eliminate the new Section 2303, as added by the Senate, that would have expanded
the liability of the Navy to cover business disruption costs. The Administration
urged the elimination of Section 2303, arguing that “it would require the Navy to
cover shipbuilding costs that are routinely borne by private insurance, creating an
incentive for insurance companies to deny payments ... [and would expand] the scope
of the Navy’s liability ... [and] limit flexibility in future contract negotiations because
shipbuilders could claim business disruption for years to come,” including costs of
“any affected shipyard — including those completely unrelated to DOD.”83
82 Assistant Secretary of the Navy, John J. Young, Memorandum for Deputy Secretary of
Defense (Acting), “Hurricane Katrina,” September 21, 2005.
83 OMB, “Statement of Administration Policy, H.R. 4939 — Emergency Supplemental
Appropriations Act for Defense, the Global War on Terror, and Hurricane Recovery, 2006,”
April 25, 2006 (Senate), p.3;
(continued...)

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In Senate floor action, the Senate rejected by 48 to 51 an amendment proposed
by Senator Coburn that would have removed Section 2303 of the bill which would
require the Navy to renegotiate contracts to pay the costs of “any business disruption
incurred by a ship construction contractor” due to Hurricane Katrina.84 Senator
Coburn argued that advance payment by the Navy of such costs would make it
unlikely that Northrop Grumman would collect from its insurer for those losses.85
This was a contentious conference issue because the Senate language was not
included in the House bill and House report language emphasized that the Navy
should be sure not to reimburse the contractor for costs that could be covered by
insurance.
In floor debate, Senator Cochran defended Section 2303, contending that the
language provides that the government would be reimbursed for any insurance
monies received by the contractor. In floor debate, Senator Cochran defended
Section 2303, contending that if the Navy paid up front, “with the possibility of
insurance proceeds offsetting Government costs,” the estimated $140 million cost of
the provision would be less than the cost of a three-to-six month delay in
shipbuilding. Senator Cochran also emphasized that the $140 million would come
out of the total of $2.7 billion requested by the Navy, a position that the Navy might
dispute.86
Section 2302 would:
! allow the Navy to “pay the costs of any business disruption incurred
by a ship construction contractor” associated with Hurricane
Katrina;
! require the Secretary of the Navy to adjust contracts to take into
account such business disruption costs;
! declare that if the government pays the contractor for such damages,
those amounts may not be used to “reduce payments otherwise
payable,” i.e. payments that would be the insurance company’s
responsibility, or allow the contractor to collect from both the
government and the insurance company; and
! require the contractor to reimburse the government for any insurance
payments received with the monies credited to the original account.87
83 (...continued)
[http://www.whitehouse.gov/omb/legislative/sap/109-2/hr4939sap-s.pdf].

84 Section 2303 (a) and (c) in H.R. 4939 as marked up by the Senate Appropriations
Committee.
85 See Congressional Record, May 2, 2006, p. S3865 for comments by Senator Coburn.
86 See Congressional Record, May 3, 2006, p. S3866. The $2.7 billion includes $1.7 billion
provided in P.L.109-148 and the $1 billion in the FY2006 supplemental request.
87 Section 2303, H.R. 4939 as marked up by the SAC; the bill says that any amounts received
by the contractor for business disruption may not be “treated as collateral insurance,” which
means recovered from more than one source.

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In its report, the Senate Appropriations Committee stated that it “is in the best
interest of the Department of the Navy and national security to restore compromised
shipyard capability,” and “also ... to ensure industry seeks reimbursement by
insurance companies to the maximum extent.” The report also stated that the
committee expects the shipbuilders to reimburse the Navy for any insurance receipts
received for business disruption costs.88
Section 2303 would expand the types of costs that the Navy would be liable to
pay, reduce the Navy’s bargaining leverage with its contractors, and affect the
contractors’ resolve in negotiating with its insurer. This new language would require
the Navy to renegotiate its current contracts with Northrop Grumman to cover
business disruption losses — chiefly additional labor hours and overhead — for ships
being built in the existing shipyards. The Navy is expected to face pressure from
Northrop Grumman to pay business disruption costs in advance with the contractor
required to reimburse the government in the event that it receives monies from its
insurer.
If the Navy pays these costs, however, the insurer could argue that it no longer
needed to reimburse Northrop because it would not have suffered a loss. In fact, the
language in Northrop’s policy with Factory Mutual states that “The company will not
be liable for any loss to the extent that the Insured has collected for such loss from
others.”89 Thus if Northrop collects from another source (in this case, the Navy), then
the insurance company or the court might decide that the company has not suffered
a loss and hence could not collect from in its insurer. The Senate language mirrors
a proposal recently made by Northrop Grumman, the primary contractor affected.90
Although Northrop Grumman argues that the advance agreement and relevant
court case would ensure that the government would be reimbursed “if the insurance
carriers were required to pay for that loss,” they acknowledge that the insurance
companies “potentially may argue that they are entitled to a set-off of the amounts
paid by the government.”91 An advance agreement could also allow Northrop to be
reimbursed for certain losses not covered by insurance.
Recently, Assistant Secretary of the Navy Delores Etter said that “it would not
be a good precedent” for the Navy to pay for insured damages in advance “because
we don’t think the insurance companies are as likely to follow through if we’ve
already covered it for them.”92 This view reflects an earlier policy memorandum
from the Office of the Secretary of Defense advising the Navy “to ensure that the
Government does not approve payments for contractor costs associated with
88 S.Rept. 109-230, p. 62.
89 Northrop Grumman, “Hurricane Katrina White Paper,”February 21, 2006, p.7.
90 Northrop Grumman, “Hurricane Katrina Supplemental,” and “Hurricane Katrina White
Paper,”February 21, 2006.
91 Northrop Grumman, “Hurricane Katrina Recovery White Paper,” February 21, 2006, p.
15.
92 Defense Today Instant Update, “Etter Says Navy Won’t Pay for Northrop Damage That
Was Insured,” March 30, 2006.

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Hurricane Katrina until all avenues for recovery from insurance carriers have been
exhausted, conditionally allowable, there is a risk that insurers will deny coverage on
the basis that there has been no loss suffered by the contractor.” DOD’s current
acquisition regulations prohibit the payment of costs that would be covered by
insurance.93
Without the new language, the Navy’s liability for business disruption costs
would be capped for fixed price contracts and limited to certain types of costs based
on federal acquisition regulations though defining types and amounts of costs could
be difficult to determine. In the case of fixed price contracts, the Navy’s liability for
additional labor hours or overhead costs is limited by the ceiling (top) price in the
contract. Up to the ceiling price, the Navy and the contractor share cost overruns (by
50:50 or some other ratio), with the contractor’s profits being reduced as costs
increase.
Once costs exceed the ceiling price, the contractor is liable for any additional
costs. For all costs above those anticipated before the hurricanes for which they
would be liable, Northrop Grumman will presumably submit a claim to its insurance
company to pay those costs in order to protect its profits. The primary issue is who
covers those costs and at what point in time. The types of costs that would be
considered related to “business disruption” is also likely to be contentious with the
new language in Section 2303 potentially broadening the definition in current
acquisition regulations.
For cost plus contracts, the government is liable for higher costs as long as there
are appropriations available to pay those costs. If business disruption costs exceed
funding currently available, the Navy could request additional funds.
Part of the issue appeared to revolve around timing. Northrop Grumman argued
that advance payment would be helpful because business disruption claims could take
years to settle. On the other hand, the very act of the government paying those claims
could undermine both the contractor’s resolve to negotiate with and to challenge its
insurers claims in court. At the same time, advance payment could also potentially
make it more difficult for Northrop to get payment under its insurance policy.
A significant issue raised by the new language was the precedent that might be
set if the government pays in advance for “any business disruption” [italics added]
claims, which suggests that the government would be liable for all rather than only
some types and amounts of business disruption expenses. Determining business
disruption costs — for example, deciding whether shipbuilding delays are due to
hurricane damages or technical problems, or deciding whether particular types of
expenses (e.g. administrative leave for employees) would be considered allowable
— is inherently problematic. The new language, however, appeared to expand the
government’s liability.
93 As quoted in memorandum from Donald P. Springer, Defense Corporate Executive,
Defense Contract Management Agency, “Proposed Advance Agreement Related to Certain
Costs Incurred As a Result of Hurricane Katrina,” April 12, 2006.

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Concerned about the accuracy of Navy estimates and potential overlap with
private insurance claims, the House bill cut $250 million from the Navy’s $1 billion
request for additional funds to reimburse shipbuilder Northrop Grumman for
estimated higher shipbuilding costs resulting from the damage to Avondale, LA and
Ingalls, MS shipyards. The Navy would still have almost $2.5 billion — including
the $1.7 billion provided in the Katrina reallocation — for these costs.
The Committee “believes strongly that funds in this act and under this heading
in prior Acts should not be used to substitute for private insurance benefits,” and
notes that shipyards have “business interruption” insurance that could overlap with
these funds.94 As in previous conference report language, the House Committee
again required that the Navy not obligate funds unless it can certify that these costs
would not be reimbursed by a third party. The Committee noted that the Navy
submitted a certification applying to funds already received that there was no overlap
on March 1, 2006.
Military Construction. The President’s FY2006 supplemental request
proposed $405 million to replace military facilities destroyed by the 2005 Gulf Coast
hurricanes. DOD already received $1.4 billion in the Hurricane Katrina reallocation
in P.L. 108-148. Not all of the $405 million was new funding. The Administration
proposed to extend the availability through FY2010 of $234 million that was
previously appropriated in the Hurricane Katrina reallocation but was only available
through FY2006. Presumably, DOD wanted to increase the life of these monies to
replace Naval Reserve and Army National Guard facilities because it did not expect
to obligate the funds this year and the funds would therefore lapse.
The $405 million requested was for:
! $53 million to replace and relocate facilities at Navy centers at
Gulfport and Bay St. Louis, Mississippi (fitness and recreation
centers, exchange, and barracks for international students);
! $111 million to construct Air Force facilities at Keesler Air Force
Base, Mississippi (fire/rescue center, exchange, base library, aircraft
maintenance hanger);
! $24 million to construct Naval Reserve facilities in New Orleans,
Louisiana (consolidated public works center, hardened command
and control center, and crash/rescue center);
! $210 million to replace Army National Guard facilities in Louisiana
(Joint Force Headquarters, Readiness Center, and aviation support
facility); and
! $6 million to replace Air National Guard facilities in Mississippi
(storm water system and medical training center).
As was the case in the Hurricane Katrina reallocation, the appropriators scrutinized
these military construction requests to ensure that there was no overlap with funds
already received in the Hurricane Katrina reallocation (e.g., the $53 million for
Keesler and the $212 million for Gulfport) or with plans for base closures and
94 House Committee on Appropriations, Draft Report, p. 58.

CRS-75
consolidations (e.g., consolidated Naval Reserve public works center that would
support both the Naval Air Station in New Orleans and the Naval Support Activity
slated for realignment).
Congressional Action. The conference agreement proposes to finance $502
million in military construction projects, including some projects that were included
in the reallocation of Katrina funds in DOD’s regular FY2006 appropriation act (P.L.
109-148), which would be financed by a rescission of FY2006 monies.95 This
provision would reverse cuts in the House-passed bill in reaction to late submission
of justification materials, and questions about various other projects. During floor
consideration, the House adopted an amendment by Representative Taylor, restoring
$55.9 million to rebuild Navy and Air Force exchanges that had been cut by the
House Appropriations Committee. The House Committee said in its report that the
services could use non-appropriated funds to rebuild exchanges, as is the general
practice.
The Senate measure reduced DOD’s military construction request from $405
million to $339 million, above the $190 million provided by the House. The smaller
reductions by the SAC reflected its funding of Army National Guard projects —
disapproved by the House — and its smaller cut to Air Force planning and design
funds.
Request for Increased Flexibility to Transfer Funds. As enacted, H.R.
4939 rejects DOD’s request to transfer funds between military construction and other
appropriations accounts after enactment that would have applied to funds in the
current request and those in the previous Hurricane Katrina reallocation. Funds for
military construction are typically designated at the project level and transfer
authority does not generally apply to these funds. Conferees endorse a transfer cap
for Gulf-related funds of $150 million, half of the amount requested by DOD. A
$500 million transfer limit was adopted in the reallocation of Hurricane Katrina funds
in last year’s DOD bill.
Other Funding for Hurricane Damages. Like the House and the Senate
bills, the conference agreement endorses DOD’s requests for military personnel,
operation and maintenance costs, and procurement costs associated with hurricane
damage.
Army Corps of Engineers96
For much of its emergency response and recovery activities, the Army Corps of
Engineers in its assignment for its public works and engineering mission (e.g., debris
removal and demolition) under the National Response Plan receives indirect funding
through FEMA; these funds are tracked as part of FEMA’s appropriations. In
addition, Congress appropriates funds directly to the Corps for some emergency
95 H.Rept. 109-494, p. 125-126.
96 Prepared by Nicole Carter, Analyst in Natural Resources Policy. The Army Corps of
Engineers is under the budget category, Department of Defense, Civil.

CRS-76
response and repair activities. As shown in Table 21, the President’s FY2006 initial
supplemental request on February 16, 2006, for the Corps’ direct funding was $1.5
billion; on April 25, 2006, the Administration revised its request, asking for an
additional $2.2 billion for work to enhance the performance of levees in the New
Orleans area to provide protection from a 100-year coastal storm-induced flood
event. The additional $2.2 billion would be offset by a reduction to FEMA by the
same amount.
The FY2006 conference agreement includes $3.7 billion, an amount similar to
the Administration’s revised request. The distribution of these funds among Corps
activities is largely similar to the Administration’s request, as well, with the
Conference Committee recommending only that $83 million be used for Corps
activities different from those requested.
Table 21. FY2006 Hurricane Supplemental for the Army Corps
of Engineers
($s — millions)
Supp.
Supp.
Supp.
Supp.
Army Corps of Engineers Activity
Request
House
Senate
Conference
Investigations
$0.0
$0.0
$47.5
$3.3
Construction
$100.0
$100.0
$634.3
$549.4
Operation and Maintenance
$0.0
$0.0
$3.2
$3.2
Flood Control and Coastal Emergencies
$1,360.0
$1,360.0
$3,316.5
$3,145.0
Flood Control and Coastal Emergencies
$0.0
$0.0
$0.0
($15.0)
rescission
Army Corps of Engineers Total
$1,460.0
$1,460.0
$4,001.5
$3,685.9
Source: CRS calculations based on H.Rept. 109-494 and S.Rept. 109-230, adjusted for Senate floor
amendments.
Note: On April 25, 2006, the Administration revised its FY2006 supplemental request by proposing
an additional $2.2 billion for the Army Corps of Engineers (not shown in the table above); the extra
amount would be offset by a reduction to FEMA by the same amount.
Through the supplemental appropriations and reallocation efforts in response
to the 2005 Gulf Coast hurricanes, Congress already has appropriated $3.3 billion
directly to the Corps.97 The amounts in Table 21 would be in addition to those
97 Congress has directed the Corps how to use much of the $3.3 billion already provided.
Of the $3.3 billion, $980 million is for repairing existing hurricane protection, flood control,
and navigation infrastructure, and $1.59 billion is for restoring the existing hurricane
protection infrastructure to its design level of protection; that is, protection from a
fast-moving Category 3 hurricane. The agency was directed to use $540 million for
completing authorized hurricane protection projects in Louisiana that were yet to be
completed when the 2005 hurricanes struck, and $70 million for investing in natural disaster
(continued...)

CRS-77
already appropriated. The President’s revised FY2006 supplemental request of $3.7
billion for the Corps included $3.6 billion for hurricane and related flood protection
improvements, and $100 million for wetlands restoration of areas affected by
navigation channels.98 The $3.6 billion requested was designated as follows.
! $1,584 million for reinforcement and repair of floodwalls in the New
Orleans areas;
! $495 million for raising levee heights of two hurricane protection
projects in the New Orleans area;
! $530 million for modification, closure, and pumping improvement
of drainage canals in New Orleans;
! $250 million for improved protection of interior pumps in the area;
! $170 million for fortifying critical elements of New Orleans’ levees
and floodwalls;
! $350 million to improve hurricane protection along the Inner Harbor
Navigation Canal, primarily by constructing hurricane protection
gates; and
! $215 million to incorporate the local levees in Plaquemines Parish
into the federal levee system, which would transfer responsibility for
storm damage repairs from the local levee districts to the federal
government.
Congressional Action. The FY2006 conference agreement includes $3.7
billion for Corps activities, similar to the amount of the Administration’s amended
request; however, the distribution of appropriations differs from that requested. The
agreement provides $3.3 million for study on the future of the Mississippi River Gulf
Outlet, which is a navigation channel that provides a shorter connection between the
Gulf of Mexico and New Orleans than traveling along the Mississippi River and has
been criticized for contributing to wetlands loss and increasing the vulnerability to
Orleans, St. Bernard, and Plaquemines Parishes to hurricane storm damage. The
agreement provides $20.2 million of the $100 million requested for wetlands
investments to reduce storm damage; offsetting this difference is the $79.9 million
in spending that the Conference Committee recommended — $34 million for
construction projects in California ($30.4 million), Hawaii ($2.0 million) and Texas
97 (...continued)
preparedness and mitigation activities. Also, $55 million was allocated for various Corps
studies, including investigations into restoring Louisiana’s coastal wetlands, increasing the
level of hurricane protection for coastal Louisiana, and addressing Mississippi’s water
resource needs. These studies may conclude with recommendations for additional
investment of federal resources in the affected Gulf States.
98 The $100 million would augment $75 million of FY2005 hurricane supplemental
appropriations directed to Corps activities to help preserve, protect, and enhance Gulf Coast
wetlands, as well as $11 million in FY2005 supplemental reallocation appropriations and
$10 million in Corps FY2006 appropriations (P.L. 109-103) for a study of restoring coastal
Louisiana’s wetlands. This study likely will borrow elements from earlier studies conducted
by a variety of federal, state, and local entities that had recommended federal investments
in Gulf Coast wetlands protection and restoration; these earlier studies have recommended
investment packages to respond to coastal wetlands loss that range from $2 billion for
near-term actions, to $14 billion for a more comprehensive approach.

CRS-78
($1.5 million); $30 million for levee repair and modification in Terrebonne Parish,
LA; and $16 million for the restoration of funds that had been reprogrammed away
from damaged flood protection projects in Pennsylvania. The FY2006 conference
agreement rescinds $15 million previously appropriated from the Grand Isle, LA,
project due to a lack of economic justification for the project, and dedicating $75
million of FY2006 emergency funds previously-appropriated to the Corps for
wetlands actions to prevent saltwater intrusion or storm surge.
The FY2006 conference agreement differs from the Senate and House versions
of the bill. The House bill fully funded the President’s initial request for the Corps,
but the bill was approved before the revised request for an additional $2.2 billion.
The Senate bill provided not only the revised request amount for the Corps, but also
an additional $307 million — $200 million for a variety of other Louisiana flood
protection activities (e.g., removal of existing pump stations along New Orleans
drainage canals, and repair and modification of levees along the Mississippi River
and in Terrebonne Parish) and $107 million in additional funding for the Corps,
including $25 million for Louisiana Coastal Area Restoration studies and $20 million
for a national levee inventory. The $79.9 million that was not in the President’s
requests that is provided in the conference agreement is a subset of $307 million in
Senate version.
Although there exists a sense of urgency for reducing hurricane damage
vulnerability in coastal Louisiana, some have indicated that the complex mix of
existing Corps emergency and project-specific authorities raises questions regarding
the agency’s authority to proceed with the activities in the President’s FY2006
supplemental requests. The House bill specified that the appropriations “shall be
subject to authorization.” The Senate bill did not include an authorization
requirement; instead, it required that funds provided in the bill that were above the
President’s request be subject to “an official budget request.” Neither requirement
is included in the conference agreement.
Department of Homeland Security
The President’s FY2006 supplemental request for the Department of Homeland
Security (DHS) was $9.9 billion, as shown in Table 22. The FY2006 conference
agreement includes $6.7 billion for DHS activities.

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Table 22. FY2006 Hurricane Supplemental for Homeland
Security
($s — millions)
Supp.
Supp.
Supp.
Supp.
DHS Agency
Request
House
Senate
Conference
FEMA, Disaster Relief Fund
(DRF) a
$9,400.0
$9,548.0
$10,400.0
$6,000.0
FEMA Disaster Asst Direct Loan
(DADL) Program a
$301.0
$151.0
$301.0
$279.8
FEMA, Other
$75.0
$80.0
$81.8
$81.8
United States Coast Guard
$69.5
$95.1
$282.4
$280.7
Customs and Border Protection
$16.0
$17.7
$17.7
$17.7
Office of the Inspector General
$13.5
$13.5
$0.0
$2.0
DHS Total
$9,875.0
$9,905.3
$11,082.9
$6,662.0
Source: CRS calculations based on H.Rept. 109-494 and S.Rept. 109-230, adjusted for Senate floor
amendments.
Note: On April 25, 2006, the Administration revised the FY2006 supplemental request by proposing
an additional $2.2 billion for the Army Corps of Engineers; the extra amount for the Corps would be
offset by a reduction to FEMA DRF by the same amount. On May 18, 2006, the Administration
revised its FY2006 request again, proposing $1.9 billion for border security, primarily funded through
Defense and Homeland Security, with an offset from its request for Defense, primarily procurement,
of an equal amount. The table shows the initial request and not the revisions.
a. A maximum of $150 million of the amount provided to DRF in the House bill was authorized to
be transferred to the FEMA DADL program. In addition, $712 million of the amount provided
to the Small Business Administration (SBA) in the House bill was required to be transferred to
DRF.
Federal Emergency Management Agency.99 The DHS exercises broad
authority to address catastrophes resulting from terrorist attacks as well as natural
disasters. The Homeland Security Act of 2002 (P.L. 107-296) transferred the
functions, relevant funding, and most of the personnel of 22 agencies and offices to
the DHS, which was created by the act. The Federal Emergency Management
Agency (FEMA) and the United States Coast Guard (USCG) were among the
agencies transferred to DHS.100 FEMA is specifically charged to prepare for,
respond to, recover from, and lessen the effects of, emergencies, regardless of cause.
Through appropriations made to the Disaster Relief Fund (DRF), assistance
authorized by the Robert T. Stafford Disaster Relief and Emergency Assistance Act
99 Prepared by Keith Bea, Specialist in American National Government.
100 For information on regular FY2006 funding for DHS, see CRS Report RL32863,
Homeland Security Department: FY2006 Appropriations, by Jennifer E. Lake and Blas
Nunez-Neto.

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— popularly known as the Stafford Act — is provided to individual victims, state
and local governments, and certain nonprofit organizations.
The President requested a supplemental appropriation of $9.9 billion for all
DHS activities; of this amount, $9.8 billion was proposed to be appropriated for
FEMA. The FEMA total in the request included $9.4 billion for the DRF, $70
million for administrative and regional operations (ARO), $5 million for
preparedness, mitigation, response, and recovery (PMRR) for personnel costs
associated with hurricane recovery, and $301 million for loans and related
administrative expenses to communities to replace lost tax revenue through the
Disaster Assistance Direct Loan Assistance (DADLA) account.
Funds appropriated to the DRF are used to provide assistance to individuals,
families, state and local governments, and certain nonprofit organizations. DRF
funds are used for all major disasters and emergencies that are the subject of
presidential Stafford Act declarations; in recent years the number of declarations
issued each year falls in the range of 40 to 70 incidents. As a general rule, the
President requests, and Congress appropriates, DRF funding to meet annual historical
averages (currently approximately $2 billion) for outlays. For example, the President
requested almost $2 billion for the DRF in the FY2007 budget submission.
Annual appropriations are not always sufficient, however, when catastrophes
such as the terrorist attacks of September 11, 2001, or Hurricane Katrina and the
other 2005 Gulf Coast hurricanes, occur. Many precedents exist for the enactment
of supplemental appropriations after catastrophes occur. For example, for FY2005,
Congress appropriated $2 billion to the DRF during the annual appropriation process
and later provided an additional $6.5 billion in supplemental disaster relief funding
(P.L. 108-324) after Hurricanes Charley, Frances, Ivan, and Jeanne struck in the
summer of 2004. Due to the wide range of assistance authorized by the Stafford Act
— from life saving response to long-term recovery and rebuilding — Congress
generally appropriates a large share of the funds in emergency supplemental
legislation to the DRF. Expenditures by FEMA for Stafford Act assistance occur on
an “as-needed-and-approved” basis from the DRF and are available on a “no-year”
basis, which means that they remain available until used.
Congressional Action. The House-approved amount, $9.8 billion, was
slightly more than the total initially requested for FEMA, prior to the modified
request of April 25, 2006, that reduced the initial supplemental request by $2.2
billion for an offset for a requested increase of $2.2 billion for the Army Corps of
Engineers. The House bill included $9.5 billion for the DRF (reduced by $2 million);
$70 million for administrative and regional operations; $10 million for preparedness,
mitigation, response, and recovery; and $151 million for DADLA and administrative
expenses, in addition to a maximum of $150 million authorized to be transferred
from the DRF to DADLA. The House measure included discretionary transfer
authority of up to $150 million to the Disaster Assistance Direct Loan Program
Account. Combined with the direct appropriation of $151 million for the Disaster
Assistance Direct Loan Program, the $301 million total in the House bill matched the
Administration’s request.

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The Senate bill would have provided the amount initially requested by the
President plus an additional $1.2 billion for the development of alternative housing
for disaster victims. In its April 25, 2006 statement of administration policy, the
Administration specifically objected to the additional funds for the DRF that were
provided in the bill as reported by the Senate Committee on Appropriations. The
Senate amount reflected an amendment by Senator Vitter to reduce the FEMA total
by $200 million to offset an increase to the Army Corps of Engineers for flood
control.
The FY2006 conference agreement includes $6.0 billion for DRF and $279.8
million for DADLA — both amounts are below the level requested. The agreement
concurs with the Senate amount for ARO and PMRR, which exceeded the request
by almost $7 million. The additional funding is to be allocated for the improvement
of emergency response planning and logistics improvements. The legislation agreed
to by conferees also includes Senate approved language concerning the
reimbursement of utility costs negotiated by state and local governments, flood
insurance interest payments, and funding for alternative housing pilot programs
initiated after the 2005 hurricanes.
Other DHS Activities. The request included $69.5 million for the United
States Coast Guard (USCG), $16 million for Customs and Border Protection (CBP),
and $13.5 million for the Office of the Inspector General (OIG). The USCG would
have been provided $62.2 million for major repair and reconstruction of facilities
damaged by the 2005 Gulf Coast hurricanes, and $7.3 million for related cleanup and
repair needs. The CBP funds would have been used to rebuild hurricane-damaged
CBP facilities and structures in New Orleans. The OIG funds would have been
transferred from DHS to other federal OIG offices to support, investigate, and audit
other federal recovery activities related to the 2005 Gulf Coast hurricanes.
Congressional Action. The House bill increased funding for the USCG to
$95.1 million, compared to the $69.5 requested, and the Senate bill would have
increased the amount to $282.4 million. For the CBP, the House bill provided a
small increase, to $17.7 million, and the Senate bill did the same. For the OIG, the
House bill provided the requested amount of $13.5 million; the Senate bill provided
no additional funds to the OIG. The FY2006 conference agreement includes $280.7
million for the USCG, $17.7 million for the CBP, and $2.0 million for the OIG.
Department of the Interior
The President’s FY2006 supplemental request for the Department of the Interior
(DOI) was $216 million, as shown in Table 23.101 The FY2006 conference
agreement includes $265.0 million for DOI programs.
101 For regular FY2006 funding for DOI, see CRS Report RL32893, Interior, Environment,
and Related Agencies: FY2006 Appropriations, by Carol Hardy Vincent and Susan Boren.

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Table 23. FY2006 Hurricane Supplemental for Interior
($s — millions)
Supp.
Supp.
Supp.
Supp.
Interior Agency
Request
House
Senate
Conference
Fish and Wildlife Service
$132.4
$132.4
$132.4
$132.4
National Park Service (NPS), Historic
$3.0
$3.0
$83.0
$43.0
Preservation Fund
NPS, Construction
$55.4
$55.4
$55.4
$55.4
United States Geological Survey
$10.2
$10.2
$10.2
$10.2
Minerals Management Service
$15.0
$15.0
$15.0
$15.0
Water and Related Resources
$0.0
$0.0
$0.0
$9.0
Interior Total
$216.0
$216.0
$296.0
$265.0
Source: CRS calculations based on H.Rept. 109-494 and S.Rept. 109-230.
Fish and Wildlife Service.102 The FY2006 conference agreement includes
$132.4 million for the Fish and Wildlife Service (FWS), the same as the
Administration’s request, the House bill, and the Senate bill. Funds would be
available for cleanup and repair of 61 national wildlife refuges in the Southeast that
were damaged by the 2005 Gulf Coast hurricanes. According to a December 2, 2005
memorandum from FWS, the 2005 Gulf Coast hurricanes caused $147.9 million in
damages and recovery costs to National Wildlife Refuges, National Fish Hatcheries,
and agency offices in two agency regions. Of the total, $12.5 million was due to the
costs of initial response and recovery. Of the remaining $135.4 million, $61 million
was for priority damages.
National Park Service, Historic Preservation Fund.103 The President
requested, and the House bill would have provided, an FY2006 supplemental of $3.0
million for the Historic Preservation Fund (HPF) of the National Park Service (NPS).
The Senate bill would have provided $83.0 million for the HPF, which is an amount
that exceeds the current total FY2006 appropriation for all of HPF’s programs ($72.2
million), and the Administration’s FY2007 budget request ($71.9 million).
The FY2006 conference agreement includes $43.0 million for the HPF,
including $40.0 million for the purpose of establishing a specialized grants-in-aid
program for the repair and rehabilitation of historic structures (particularly those on
the National Register of Historic Places) that were damaged by Hurricanes Katrina
and Rita. Grants will be directed to endangered historic properties, including those
within National Heritage Areas, that sustained the most hurricane damage. No non-
federal matching is required, and not more than 5% of the funds may be used for
102 Prepared by M. Lynne Corn, Specialist in Natural Resources.
103 Prepared by Susan Boren, Specialist in Social Legislation.

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administrative expenses. The HPF provides grants-in-aid to State Historic
Preservation Offices (SHPOs) for the protection of cultural resources and for
activities specified in the National Historic Preservation Act. According to the
National Trust for Historic Preservation, thousands of historic homes have been lost
and tens of thousands of historic properties have been damaged by Hurricanes
Katrina and Rita.104
Other Interior Activities. The request included $55.4 million for NPS
construction activities, $15 million for the Minerals Management Service (MMS),
and $10.2 million for the United States Geological Survey (USGS). The NPS would
have received $55.4 million for cleanup and repair of 12 national parks damaged by
the 2005 Gulf Coast hurricanes in addition to the HPF activities described above.
The MMS funds would have been used for relocation expenses related to the
temporary move of the MMS regional office from Louisiana to Texas. The USGS
funds would have been used for additional facility and equipment repair at USGS
sites located in the Southeast that were damaged by the 2005 Gulf Coast hurricanes.
Congressional Action. The FY2006 conference agreement provides the
amounts requested by the President for these other Interior program, the same as
would have been provided by the House and Senate bills. In addition, the conference
agreement provides $9.0 million for Water and Related Resources, an item not
requested by the President, or included in the House or Senate bills.
Department of Education105
The President’s FY2006 supplemental request included no additional funds for
the Department of Education (ED), and no funds would have been provided by the
bill as passed by the House. However, the Senate bill included $881.5 million for
education activities, as shown in Table 24, and Section 2702 of the bill modified the
provisions for the Historically Black Colleges and Universities Capital Financing
Program, providing an estimated $15.0 million of additional funding, for an overall
ED total of $896.5 million. The FY2006 conference agreement includes $285.0
million for education hurricane relief.106
104 For additional information, please see CRS Report 96-123, Historic Preservation:
Background and Funding, by Susan Boren.
105 Prepared by Rebecca R. Skinner, Specialist in Social Legislation.
106 Section 2601 of the conference agreement modifies provisions for the Historically Black
Colleges and Universities Capital Financing Program, and states that funding provided under
this section is designated as emergency spending. The section does not, however, specify
an amount of funding. As previously mention, the Senate bill would have provided an
estimated $15.0 million for this purpose.

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Table 24. FY2006 Hurricane Supplemental for Education
($s — millions)
Supp.
Supp.
Supp.
Supp.
Education Activity
Request
House
Senate
Conference
Office of the Inspector General
$0.0
$0.0
$1.5
$0.0
Hurricane Education Recovery
$0.0
$0.0
$880.0
$285.0
Education Total a
$0.0
$0.0
$881.5
$285.0
Source: CRS calculations based on H.Rept. 109-494 and S.Rept. 109-230.
a. Section 2702 of the Senate bill provides an estimated additional $15.0 million for the Historically
Black Colleges and Universities Capital Financing Program; the FY2006 conference agreement
includes a modification of the Senate provision for the Historically Black Colleges and
Universities Capital Financing Program, without including a specific appropriation amount.
While the Administration did not include funding for education in its emergency
supplemental appropriations request and the House bill did not include funding for
education, the Senate version of the FY2006 supplemental would have provided
$896.5 million for hurricane disaster education relief. The majority of this funding
would have been directed toward hurricane education recovery.
More specifically, the Senate bill would have provided $200 million to create
a new Education Relief Loan Program that would provide long-term, low-interest
direct loans to postsecondary education institutions for direct or indirect loses
suffered as a result of having to suspend their operations and being unable to reopen
in existing facilities due to the impact of Hurricanes Katrina or Rita. An additional
$650 million would have been provided for the Temporary Emergency Impact Aid
for Displaced Students program authorized by P.L. 109-148. Funds provided through
this program reimburse schools for the costs of educating students displaced by the
2005 Gulf Coast hurricanes. Of the funds provided for the displaced students, $350
million would have been designated for Innovative Education State Grants [Title V-
A of the Elementary and Secondary Education Act (ESEA)] for 2006-2007 school
year expenses related to the consequences of Hurricanes Katrina and Rita. These
funds would have been available to ED until December 31, 2006. The Senate bill
included $30 million under the Fund for the Improvement of Postsecondary
Education (FIPSE) specifically to provide grants to institutions of higher education
(IHEs) adversely affected by the 2005 Gulf Coast hurricanes. An additional $1.5
million was included for the Office of the Inspector General to conduct audit and
investigative activities related to the disbursement of resources related to hurricane
education relief.
In addition, the Senate bill would have modified provisions of the Historically
Black College and University Capital Financing Program for institutions located in
an areas affected by a Gulf Coast hurricane disaster. While the proposed statutory
language does not specify appropriations to support these modifications, a table in
the Senate report (S.Rept. 109-230, p. 139) indicated that $15 million would have
been provided for this purpose. Finally, the bill would have provided the Mississippi

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Institutes of Higher Learning with the authority to determine which IHEs would
receive additional flexibility in the use of funds provided under P.L. 109-148 for
hurricane education relief activities.107 In its April 25, 2006 statement of
administration policy, the Administration did not specifically object to the additional
educational funds that would be provided in the bill as reported by the Senate
Committee on Appropriations.
The FY2006 conference agreement includes $235 million to assist elementary
and secondary schools serving displaced students during the 2005-2006 school year
under the Temporary Emergency Impact Aid program. The conference agreement
also extends the period by which state educational agencies and local educational
agencies may obligate funds received under the Temporary Emergency Impact Aid
program from August 1, 2006, to September 30, 2006, provided funds are used only
for expenses incurred during the 2005-2006 school year. The agreement does not
provide additional support for displaced students through ESEA Title V-A, as
proposed by the Senate bill. The conference agreement also provides $50 million
under FIPSE to assist IHEs adversely affected by the 2005 Gulf Coast hurricanes.
It would not create a new loan program for IHEs affected by the Gulf hurricanes or
provide funding for the Office of Inspector General, as proposed by the Senate bill.
It does provide the Mississippi Institutes of Higher Learning with the authority
proposed by the Senate bill. Finally, the conference agreement modifies provisions
of the HBCUs Capital Financing Program, as proposed by the Senate, such as
providing the Secretary with the authority to waive or modify any statutory or
regulatory provisions to ensure that the calculation of financing for an HBCU reflects
changes in the financial condition of the institution as a result of the 2005 Gulf Coast
hurricanes. The proposed statutory language authorizing these modifications does
not specify the level of appropriations to support the modifications. The conference
agreement, however, scored this provision at $15 million, the same as the Senate
amendment.
Department of Veterans Affairs108
The President’s FY2006 supplemental request for the Department of Veterans
Affairs (VA) was $600 million, as shown in Table 25.109 The FY2006 conference
agreement includes $585.9 million for the VA.
107 For additional information about hurricane education relief provided by the federal
government, please see CRS Report RL33236, Education-Related Hurricane Relief:
Legislative Action, by Rebecca R. Skinner et al., and CRS Report RL33089, Education and
Training Issues Related to Major Disasters, coordinated by Charmaine Mercer.
108 Prepared by Sidath Viranga Panangala, Analyst in Social Legislation.
109 For information on regular and supplemental FY2006 funding for VA medical activities,
see CRS Report RL32975, Veterans’ Medical Care: FY2006 Appropriations, by Sidath
Viranga Panangala.

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Table 25. FY2006 Hurricane Supplemental for Veterans Affairs
($s — in millions)
Supp.
Supp.
Supp.
Supp.
VA Project
Request
House
Senate
Conference
Medical Center, New Orleans
$600.0
$550.0
$561.0
$550.0
Land Disposal, Gulfport
$0.0
$0.0
$62.0
$35.9
VA Total
$600.0
$550.0
$623.0
$585.9
Source: CRS calculations based on H.Rept. 109-494 and on S.Rept. 109-230.
Medical Center, New Orleans. The Administration requested $600 million
for VA’s Construction, Major Projects account to be used for rebuilding the VA
Medical Center in New Orleans. Proposed funding for this project was previously
included in the October 28, 2005 request, but Congress provided only $75 million for
advance planning and design in P.L. 109-148. The conference committee did not
include the full amount of funding because it felt that there was insufficient
information to determine the actual cost of the project. In the FY2006 conference
report, H.Rept. 109-359, VA was directed to report to the Committees on
Appropriations of both Houses of Congress by February 28, 2006, on the long term
plans for the replacement hospital construction. The report submitted by VA
estimated that the cost of construction of a new VA Medical Center in New Orleans
would be $636 million.
The FY2006 supplemental request included a general provision to enable the
VA to use $122 million of the $225 million included for the Medical Services
account in P.L. 109-148 for activation of the new hospital in New Orleans. The VA
would be allowed to transfer this money among the appropriate accounts for the
purpose of funding these activation costs.
Congressional Action. The House bill recommended $550 million for
rebuilding the VA Medical Center in New Orleans, $50 million less than the
Administration’s request. In addition, the Secretary of Veterans Affairs was
authorized to transfer up to $275 million of this amount to the “Medical Services”
account, to be used only for unanticipated costs related to the global war on terror.
Availability of the $550 million appropriation was made contingent on the enactment
of authority for it by June 30, 2006.
The Senate supplemental bill provided $623 million for the Construction, Major
Projects account, $73 million above the House amount. Of this amount, $561 million
was provided for the construction of a new VA Medical Center in New Orleans.
Together with the previous appropriation of $75 million in P.L.109-148, the total
amount of funding for reestablishing the VA Medical Center in New Orleans would
have been $636 million. The Senate bill designated $62 million of the total amount
recommended for the Construction, Major Projects, account to be used for the
disposal and cleanup of land associated with the VA medical facility in Gulfport,
Mississippi.

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The Senate bill did not include a general provision proposed in the President’s
supplemental request to transfer $122 million from the Medical Services account to
other accounts within VA. However, the bill did include language allowing VA to
use $198.6 million that was previously appropriated under P.L. 109-148, and
provided transfer authority of these funds between Medical Services, Medical
Facilities, Departmental Administration, Construction Minor Projects, and
Information Technology Systems accounts. Furthermore, the Senate bill directed the
VA to transfer land associated with the VA medical facility in Gulfport, Mississippi,
to the City of Gulfport, and to purchase land to construct a new medical facility in
Biloxi, Mississippi.110
During floor consideration of the supplemental bill, the Senate adopted an
amendment offered by Senator Akaka to provide $430 million for the VA medical
services account for FY2006 (not reflected in Table 25). The use of these funds
would not necessarily be related to the 2005 Gulf Coast hurricanes. Of this
additional amount: $168.0 million was designated to address veterans’ mental health
care needs, including Post-Traumatic Stress Disorder (PTSD); and $80.0 million was
designated for the provision of readjustment counseling services to veterans.
The FY2006 conference agreement includes $585.9 million for the VA
Construction, Major Projects account. Of this amount $550.0 million will be for the
construction of a new VA medical facility in New Orleans. The remaining $35.9
million will be for the environmental cleanup and removal of debris from the VA
medical facility in Gulfport, Mississippi, and for transfer of land associated with the
facility, to the City of Gulfport. The conference agreement did not include the Senate
provision to provide $430.0 million for the VA medical services account for FY2006,
and did not include the House provision to transfer $275 million to the VA Medical
Services account from the VA Construction, Major Projects account. Furthermore,
the conference agreement does not include bill language authorizing site acquisition
and construction of medical facilities in New Orleans, Louisiana, and Biloxi,
Mississippi. S. 3421 has been introduced in the Senate that would, among other
things, provide authorization for the construction of new VA medical facilities in
New Orleans and Biloxi. A House companion measure has not yet been introduced.
Department of Transportation111
The President’s FY2006 supplemental request included no additional funds for
the Department of Transportation (DOT), and no funds would have been provided
by the House bill. However, the Senate supplemental bill included $1.5 billion for
110 Under the Capital Asset Realignment for Enhanced Services (CARES) program, VA had
planned on closing the VA Medical Center in Gulfport, Mississippi, and transferring the
patient workload to the VA Medical Center in Biloxi, Mississippi. To accommodate the
increased workload, VA had planned on constructing a new facility in Biloxi. Hurricane
Katrina completely destroyed the VA Medical Center in Gulfport. As a result, VA does not
plan on reconstructing this facility, and will transfer the land back to the City of Gulfport.
VA is now planning on accelerating the construction of the new medical facility in Biloxi.
111 Prepared by John Frittelli, Specialist in Transportation.

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various transportation activities, as shown in Table 26, and the conference agreement
provides $702.4 million, with an offsetting rescission.
Table 26. FY2006 Hurricane Supplemental for Transportation
($s — millions)
Supp.
Supp.
Supp.
Supp.
Transportation Activity
Request
House
Senate
Conference
Emergency Highway Assistance
$0.0
$0.0
$594.0
$702.4
Emergency Assistance for Public
$0.0
$0.0
$200.0
$0.0
Transportation
Capital Grants for Rail Line Relocation
$0.0
$0.0
$700.0
$0.0
Projects
Transportation Subtotal
$0.0
$0.0
$1,494.0
$702.4
Highway Trust Fund rescission
$0.0
$0.0
$0.0
($702.4)
Transportation Total (net)
$0.0
$0.0
$1,494.0
$0.0
Source: CRS calculations based on H.Rept. 109-494 and S.Rept. 109-230.
The Senate bill included $700 million to relocate a CSX freight rail line further
inland from the Gulf Coast. The President did not request this funding nor was it
included in the House bill. The rail line currently runs along the coast from
Pascagoula, MS through Gulfport, MS to New Orleans. The track was heavily
damaged from the Hurricane and CSX spent approximately $250 million of insurance
funds to repair the line. The line reopened to traffic in early February 2006.
Supporters of this measure contend that the purpose of relocating the rail line further
inland is to make it less susceptible to storm damage in the future. Coastal
communities have wanted to move the rail track even before the 2005 Gulf Coast
hurricanes because of safety concerns at rail crossings and trains blocking street
traffic. Critics of the funding measure contend that the existing rail line has just been
repaired, is in good working order, and that relocating the line primarily benefits land
developers along the coast. They note that freight railroads are private sector
corporations that primarily finance their own rights-of-way and argue that the federal
government should not be paying the bill for this project.
The Senate bill included highway and transit funding that was not included in
the President’s request nor in the House version. The Senate bill included $594
million for the Emergency Relief (ER) Program of the Federal Highway
Administration. These funds are to carry out ER projects that are included in the ER
backlog table or are currently being considered for inclusion in the backlog table.
The ER backlog table includes previous disaster reconstruction projects across the
United States.112 Within the context of Hurricanes Katrina, Rita, and Wilma,
Congress has previously appropriated $2.75 billion in ER funds for the repair of
112 It is not unusual for ER backlog projects to be funded under an emergency requirement
designation.

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highways damaged by these storms.113 The Senate bill included $200 million in
federal grants for the repair of public transit systems damaged by Hurricane Katrina.
In its April 25, 2006 statement of administration policy, the Administration
specifically objected to the additional transportation funds that are provided in the
bill as reported by the Senate Committee on Appropriations.
The FY2006 conference agreement includes $702.4 million for the ER program
of the Federal Highway Administration, which is about $108 million more than the
Senate had proposed. Funds for the ER program are offset by a rescission of an equal
amount from the Highway Trust Fund. The conference agreement does not include
funding for the relocation of the CSX rail line nor the funding for public
transportation as proposed by the Senate.
Department of Housing and Urban Development
The President’s FY2006 supplemental request for the Department of Housing
and Urban Development (HUD) was $4.4 billion, as shown in Table 27.114 The
FY2006 conference agreement includes $5.2 billion for HUD activities.
Table 27. FY2006 Hurricane Supplemental for HUD
($s — millions)
Supp.
Supp.
Supp.
Supp.
HUD Program
Request
House
Senate
Conference
Tenant-Based Rental Assistance
$202.0
$0.0
$202.2
$0.0
Community Development Block Grant
$4,200.0
$4,200.0
$5,200.0
$5,200.0
HUD Total
$4,402.0
$4,200.0
$5,402.2
$5,200.0
Source: CRS calculations based on H.Rept. 109-494 and S.Rept. 109-230.
Community Development Block Grants.115 Previously, Congress
included $11.5 billion of FY2006 supplemental appropriations for disaster-recovery
assistance under the Community Development Block Grant (CDBG) in P.L. 109-148,
to assist the five states (Louisiana, Mississippi, Alabama, Texas, and Florida)
impacted by the 2005 Gulf Coast hurricanes. Of this amount, $6.2 billion was
allocated to Louisiana. Among other provisions, (1) affected states were authorized
to use up to 5% of their allocation for administrative costs; (2) HUD was authorized
to grant waivers of program requirements (except those relating to fair housing,
nondiscrimination, labor standards, and the environment); and (3) Mississippi and
Louisiana were authorized to use up to $20 million for Local Initiative Support
113 For further information on highway assistance as it relates to recent hurricanes, see CRS
Report RS22268, Repairing and Reconstructing Disaster-Damaged Roads and Bridges:
The Role of Federal-Aid Highway Assistance, by Robert S. Kirk.
114 For information on regular FY2006 funding for HUD, please see CRS Report RL32869,
The Department of Housing and Urban Development (HUD): FY2006 Budget, by Maggie
McCarty, et al.
115 Prepared by Eugene Boyd, Analyst in American National Government.

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Corporation and Enterprise Foundation-supported local community development
corporations. The HUD income targeting requirement for activities benefitting low-
and moderate-income persons was decreased from 70% to 50% of the state’s
allocation.
The President’s FY2006 supplemental request included $4.2 billion for
additional CDBG disaster relief for the state of Louisiana. These funds would have
been used for expenses related to the consequences of the 2005 Gulf Coast
hurricanes, except that none of the funds could be used for activities reimbursable by
FEMA, SBA, or the Army Corps of Engineers. Funds would have been targeted to
flood mitigation activities which could include infrastructure improvements, real
property acquisition or relocation, and other activities designed to reduce the risk of
future damage. As a condition of receipt of the funds, the state would have been
subjected to an administrative expense ceiling of 5%, and the state would have been
allowed to seek waivers of program requirements except those related to fair housing,
nondiscrimination, labor standards, and environmental review.
During a March 8, 2006 hearing by the Senate Committee on Appropriations on
the President’s supplemental appropriations request, Senator Hutchison of Texas
voiced concern about the absence of additional assistance for Texas. The Senator
noted that the Administration’s proposal to provide $4.2 billion in emergency
supplemental assistance exclusively for use by Louisiana was unfair to Texas, which
used its regular CDBG appropriations to assist Katrina victims evacuating from
Louisiana. In addition to the cost of addressing the immediate needs of evacuees, the
state had also incurred additional educational and public safety expenses associated
with the significant increase in its population of hurricane victims. In his testimony
before the Committee, Texas Governor Rick Perry requested an additional $2 billion
in CDBG be awarded to the state.
Congressional Action. The House supplemental bill provided $4.2 billion
for CDBG disaster recovery activities, the same amount as requested by the
Administration; the Senate bill provided $5.2 billion in CDBG assistance. The
Senate bill expanded on language included in the House bill prohibiting the use of
CDBG funds for activities reimbursable by FEMA or the Army Corps of Engineers
to include activities of the Small Business Administration. Both the House and
Senate bills made funds available to the five states affected by the 2005 Gulf Coast
hurricanes; the Administration had sought to provide the assistance exclusively to
Louisiana. During floor consideration of the bill, the Senate approved an amendment
by Senator Cornyn of Texas that would have required each of the five states to
receive a minimum allocation of 3.5% of the amount appropriated for CDBG disaster
relief assistance. The House and Senate versions of the bill targeted assistance to
both infrastructure reconstruction and activities that would spur the redevelopment
of affordable rental housing, including federally assisted housing and public housing.
In its April 25, 2006 statement of administration policy, the Administration
specifically objected to the additional $1 billion in CDBG funds that was included
in the Senate bill as reported by the Senate Committee on Appropriations.
The FY2006 conference agreement includes $5.2 billion for CDBG disaster
recovery activities to be allocated among the five states affected by the Gulf Coast
hurricanes of 2005; the agreement is consistent with the Senate bill. The agreement

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limits the amount that any one state may receive to $4.2 billion and encourages states
to target assistance to infrastructure reconstruction and activities that would spur the
redevelopment of affordable rental housing, including federally assisted housing and
public housing. It does not include language originally included in the Senate bill
prohibiting the use of CDBG funds for activities reimbursable by the Small Business
Administration, but keeps in place the provision prohibiting the use of CDBG funds
for activities reimbursable by FEMA or the Army Corps of Engineers. The FY2006
conference agreement retains language included in the House and Senate bills
affecting the use and administration of these funds. The agreement would:
! require that at least $1 billion of the CDBG amount be used for
repair and reconstruction of affordable rental housing in the
impacted areas;
! allow each state to use no more than 5% of its supplemental CDBG
allocation for administrative expenses;
! allow the affected states to seek waivers of program requirements,
except those related to fair housing, nondiscrimination, labor
standards, and environmental review;
! allow Governors of the affected states to designate one or more
entities to administer the program;
! decrease the low- and moderate-income targeting requirement from
70% to 50% of the funds awarded;
! require each state to develop a plan for the proposed use of funds to
be reviewed and approved by HUD;
! direct HUD to ensure that each state’s proposed plan gives priority
to activities that support infrastructure development and affordable
rental housing activities;
! require each state to file quarterly reports with House and Senate
Appropriations Committees detailing the use of funds;
! require HUD to file quarterly reports with the House and Senate
Appropriations Committees identifying actions by the Department
to prevent fraud and abuse, including the duplication of benefits; and
! prohibit the use of CDBG funds to meet matching fund requirements
of other federal programs.
The conference agreement includes some language not included in the House
or Senate versions of the bill. Of the $5.2 billion appropriated for CDBG disaster
recovery activities, $12 million is be transferred to HUD’s salaries and expenses
account with $7 million of this amount set aside for the cost of administering the
Katrina Disaster Housing Assistance Program/ Disaster Voucher Program
(KDHAP/DVP). The Senate bill would have made KDHAP/DVP funds available
under the Tenant-based Rental Assistance account, which was not funded in the final
conference agreement (see below). The agreement transfers $9 million to the Office
of Inspector General and $6 million to HUD’s Working Capital Funds to be used to
improve the capabilities of HUD’s disaster recovery grant reporting system.

CRS-92
Tenant-Based Rental Assistance.116 In October 2005, FEMA engaged
HUD to provide rental assistance to families that were unlikely to qualify for
standard FEMA assistance — specifically, families that were receiving HUD rental
assistance or were homeless when the storms struck. In December 2005, P.L.109-
148 transferred $390 million to HUD from FEMA to provide this rental assistance
directly. HUD has responded to its mission assignment by implementing the Disaster
Voucher Program (DVP). The DVP is largely governed by Section 8 voucher
program rules,117 although the Secretary of Housing and Urban Development was
given the authority to waive income eligibility and rent determination rules.
The President’s FY2006 supplemental request included $202 million to HUD
for tenant-based rental assistance. It was meant to pay for the last five months of the
18-month period in which the estimated 44,000 eligible families are qualified to
receive DVP assistance. The request included proposed programmatic changes that
were not included in the earlier supplemental. These changes would expand
eligibility to several categories of HUD-assisted families that were eligible for
assistance under HUD’s mission assignment from FEMA, but are not currently
eligible for DVP. Language in the supplemental request would have waived a
portion of current Section 8 voucher law that requires lease terms to last no less than
one year. Finally, the request would have permitted owners of project-based rental
assistance units in certain parishes in Louisiana — after first offering a right of first
return to displaced families — to offer vacant units to city or parish employees for
up to one year.
Congressional Action. The House bill did not include additional funding
for HUD’s tenant-based rental assistance account. The bill included the language
requested by the President to expand eligibility for DVP assistance to certain
categories of families and to permit the Secretary to waive the length of leases. The
bill rejected the President’s proposed language that would have permitted property
owners to make vacant HUD-assisted units available to city or parish employees.
The Senate bill included $202 million for the tenant-based rental assistance
account, as the President requested. Like the House bill, the Senate bill included the
President’s requested expansion of eligibility and waiver authority. Unlike the House
bill, the Senate bill included authority to make vacant properties available to city and
parish employees for up to one year, as requested by the President. The Senate bill
included two set-asides not requested by the President. The first was for up to $5
million for HUD data systems. The second was for no less than $100 million for
project-based rental assistance.118 The funds would have been available for buildings
that were receiving HUD-assistance before they were damaged by the storm, as well
as new structures built using Low-Income Housing Tax Credits. The Senate
116 Prepared by Maggie McCarty, Analyst in Social Legislation.
117 Section 8 of the U.S. Housing Act of 1937, as amended, provides tenant-based vouchers
for low-income people.
118 Unlike vouchers — which are provided to families to use in the housing of their choice
— project-based rental assistance is provided to specific units of housing for low-income
families.

CRS-93
Committee report noted that the funds “will help expedite the preservation of the
stock of low-income housing in the gulf.”
The FY2006 conference agreement provides no funds for tenant-based rental
assistance. However, the conference agreement does follow the House proposal to
provide the Secretary with requested waiver authority and expands eligibility for
assistance. The conference agreement requests, as did the Senate bill, that HUD
report back to Congress within 180 days on States’ efforts to address the needs of the
disabled, elderly, and homeless.
Other Departments and Agencies
The President’s FY2006 supplemental request for other departments and
agencies was $59.7 million, as shown in Table 28. The FY2006 conference
agreement includes $307.5 million for other departments and agencies.

CRS-94
Table 28. FY2006 Hurricane Supplemental: Other Departments
and Agencies
($s — millions)
Supp.
Supp.
Supp.
Supp.
Department or Agency
Request
House
Senate
Conference
Justice
$9.7
$7.0
$20.2
$8.5
National Aeronautics & Space
$0.0
$30.0
$35.0
$35.0
Administration
Environmental Protection Agency
$13.0
$13.0
$13.0
$13.0
Labor
$0.0
$0.0
$34.5
$16.0
Health and Human Services
$0.0
$0.0
$28.7
$12.0
Corporation for National and
$0.0
$0.0
$20.0
$10.0
Community Service
Social Security Administration
$0.0
$0.0
$0.3
$0.0
Historically Black Colleges and
Universities Capital Financing a
$0.0
$0.0
$15.0
$15.0
Armed Forces Retirement Home b
$0.0
$0.0
$176.0
$176.0
General Services Administration
$37.0
$37.0
$37.0
$37.0
Election Assistance Commission
$0.0
$0.0
$30.0
$0.0
Other Department/Agency Total
$59.7
$87.0
$409.7
$322.5
Source: CRS calculations based H.Rept. 109-494 and S.Rept. 109-230, adjusted for Senate floor
amendments.
a. The FY2006 conference agreement modifies the Senate provision for HBCU Capital Financing,
but is scored at the same $15 million level as the Senate text.
b. The Administration requested a consolidation of $75.7 million in prior appropriations for the
Armed Forces Retirement Home.
Department of Justice. The request included $9.7 million in supplemental
funds for the Department of Justice (DOJ) United States Attorneys for salaries and
expenses related to the significantly increased caseload for prosecutions and
investigations of cases stemming from the 2005 Gulf Coast hurricanes.119
Congressional Action. The House bill provided $7 million of the DOJ
request, including $5 million, as proposed, for U.S. Attorneys activities, and $2
million for the Criminal Division and the Civil Division, less than the $3.2 million
request. The bill did not approve a DOJ request to transfer funds from this account
119 For information on regular FY2006 funding for DOJ, see CRS Report RL32885,
Science, State, Justice, Commerce and Related Agencies (House)/Commerce, Justice,
Science and Related Agencies (Senate): FY2006 Appropriations, by Ian F. Fergusson and
Susan B. Epstein.

CRS-95
to other agency departments engaged in fraud investigations and prosecutions. The
Senate bill recommended increasing the amount to $20.2 million. The FY2006
conference agreement included $8.5 million for the Department of Justice (DOJ),
including $2.0 million for general legal activities and $6.5 million for United States
Attorneys.
National Aeronautics and Space Administration. The Administration
did not request supplemental funds for the National Aeronautics and Space
Administration (NASA). The House bill provided $30.0 million for NASA for the
repair and rehabilitation of facilities and other costs associated with hurricane
damage. The amount provided in the Senate bill was $35.0 million. The FY2006
conference agreement includes $35.0 million for NASA.
Environmental Protection Agency. The request included $13 million in
supplemental funds for the Environmental Protection Agency (EPA). Of this
amount, $7 million would have been allocated for the Leaking Underground Storage
Tank Program for assessments and corrective actions related to leaking storage tanks.
The remaining $6 million would have been provided for EPA Environmental
Programs and Management for environmental monitoring, assessment, and analysis
necessary to protect public health during reconstruction and recovery.120
Congressional Action. The House bill fully funded the Administration’s
request for the EPA. The Senate bill provided the same amount. The FY2006
conference agreement includes $13.0 million for EPA.
Armed Forces Retirement Home.121 The request would consolidate $76
million of previously appropriated funds to implement the findings of a
congressionally mandated study due in March 2006 to determine the rehousing of
displaced military retirees who lived at the Gulfport Armed Forces Retirement Home,
that was damaged by the Gulf Coast hurricanes.122 Residents of that facility were
relocated to the Armed Forces Retirement Home in Washington, D.C. The
Administration’s proposal would tap $56 million in funds already appropriated in the
Hurricane Katrina reallocation and $20 million in unobligated balances.123
120 For information on regular FY2006 funding for the EPA, see CRS Report RL32893,
Interior, Environment, and Related Agencies: FY2006 Appropriations, Carol Hardy
Vincent and Susan Boren.
121 Prepared by Amy Belasco, Specialist in National Defense. The Armed Forces Retirement
Home is part of the Department of Defense, Civil budget function.
122 H.Rept. 109-359, p. 513.
123 See entries for “Armed Forces Retirement Home” in OMB, FY2005 Supplemental,
Estimate No. 12, Defense, Homeland Security, and Corps of Engineers (Disaster Relief
associated with Hurricane Katrina, 9-7-05; [http://www.whitehouse.gov/omb/budget/
amendments/supplemental_9_7_05.pdf]; and in OMB, Estimate No. 2, FY2006 Emergency
Supplemental (various agencies), Ongoing Hurricane Recovery Efforts in the Gulf States,
2-16-06. [http://www.whitehouse.gov/omb/budget/amendments/supplemental1_
2_16_06.pdf]

CRS-96
Congressional Action. The conference agreement adopts the $176 million
funding level proposed in the Senate bill, as well as consolidating $64.5 million in
previous provided funds for the plan, design, and construction of a new Armed
Forces Retirement Home in Gulfport, Mississippi. According to the conference
report, this amount should be sufficient for a new facility and that some expenses
included in DOD’s February 28, 2006 report above that level would not be
appropriate.124
General Services Administration. The request included $37 million in
supplemental funds for the General Services Administration (GSA) Federal
Buildings Fund. These funds were to be used to cleanup and repair the multiple
federal buildings that received wind and water damage from the 2005 Gulf Coast
hurricanes. Funds would have been used to make both short- and long-run repairs
and alterations.125
Congressional Action. The House bill fully funded the request for GSA; the
Senate bill did likewise. The FY2006 conference agreement includes $37.0 million
for GSA.
Low-Income Home Energy Assistance Program.126 During markup of
the FY2006 supplemental measure, the House Committee adopted an amendment by
Representative David Obey, as modified by Representative Ralph Regula, that would
have made available in FY2006 funds for the Low-Income Home Energy Assistance
Program (LIHEAP) that were appropriated for FY2007 in the Deficit Reduction Act
of 2005 (P.L. 109-171). LIHEAP is a program administered by the Department of
Health and Human Services. The Deficit Reduction Act contained $1 billion for
LIHEAP, $250 million of which was to be distributed as regular funds (distributed
to all states based on a formula), and $750 million as contingency funds (allotted to
one or more states, at the Administration’s discretion, and based on emergency need).
The original Obey amendment would have made the entire $1 billion available for
FY2006, while the Regula modification would have made only the $750 million in
contingency funds available for FY2006. The contingency funds would have
remained available until the end of FY2007 (H.R. 4939, section 3010). The Senate
bill provided no supplemental funds for LIHEAP; the Senate Committee on
Appropriations struck the LIHEAP language due to the previous enactment of a law
with similar provisions, P.L. 109-204, on March 20, 2006.127 The FY2006
conference agreement includes no additional funds for LIHEAP.
124 H.Rept. 109-494, p. 127.
125 For information on regular FY2006 funding for the GSA, see CRS Report RL32905,
Transportation, the Treasury, Housing and Urban Development, the Judiciary, the District
of Columbia, the Executive Office of the President, and Independent Agencies: FY2006
Appropriations, by David Randall Peterman and John Frittelli.
126 Prepared by Libby Perl, Analyst in Social Legislation.
127 For further information on LIHEAP, please see CRS Report RL31865, The Low-Income
Home Energy Assistance Program (LIHEAP): Program and Funding, by Libby Perl. P.L.
109-204 provides $500 million of regular LIHEAP funds and $500 million of contingency
funds in FY2006.

CRS-97
Other Departments. Neither the President’s request nor the House bill
included funds for the Departments of Transportation, Labor, Health and Human
Services, or Education, or the Corporation for National and Community Service. The
Senate bill included nearly $2.5 billion for the following departments and agencies:
! Transportation — $1.5 billion for emergency relief highway
projects, grants for facility repairs, and repair of railroad tracks
(discussed above);
! Education — $881.5 million of aid to affected educational
institutions and students (discussed above), as well as $15.0 million
for the Historically Black Colleges and Universities (HBCU) Capital
Financing Fund;
! Labor — $34.5 million for repair to Jobs Corps centers;
! Health and Human Services — $28.7 million for facility repair,
communications network, and pest abatement activities;
! Corporation for National and Community Service — $20 million for
the AmeriCorps National Civilian Conservation Corps to support
recovery activities; and
! Election Assistance Commission — $30.0 million for costs related
to the 2005 Gulf Coast hurricanes for administering federal
elections.
For these programs, the FY2006 conference agreement includes approximately
$1.0 billion, as follows:
! Transportation — $702.4 million, with an offset (discussed above);
! Education — $285.0 million (discussed above), along with a
modification of the Senate proposal for the HBCU Capital Financing
Fund;
! Labor — $16.0 million for Job Corps centers;
! Health and Human Services — $12.0 million, including $4.0 million
for the communications network and $8.0 million for mosquito and
other pest abatement activities;
! Corporation for National and Community Service — $10 million for
the AmeriCorps National Civilian Conservation Corps; and
! Election Assistance Commission — no additional funds were
provided for administering federal elections.
Other Titles for Disaster and Related Assistance
The FY2006 conference agreement, as well as the Senate bill, includes
additional titles to H.R. 4939 that were not included in either the House bill or the
initial request by the Administration. These additional titles provide FY2006
supplemental appropriations for various types of disaster and related assistance. The
funds provided under these titles are included in Table 16, as well as other relevant
tables of this report.
! Title III of the conference agreement includes $500 million for
emergency agricultural assistance for farm producers affected by
many natural disasters, not only Hurricane Katrina. These funds are

CRS-98
included in Table 17 and discussed previously as supplemental
funding for agriculture. The Senate bill included $3.9 billion for
these activities.
! Title IV of the conference agreement provides $2.3 billion for
pandemic influenza preparedness activities. The Senate bill
included $2.6 billion, as discussed below.
! Title IV of the conference agreement includes $1.9 billion for border
security, as discussed previously. The Senate bill provided $1.9
billion as well.
! Title V of the conference agreement includes $27.6 million for
improvements of the Capitol steam plant utility tunnels; the Senate
bill included the same amount.
! Title VII of the conference agreement provides $35.6 million for
mine safety activities; the Senate bill included the same amount.
! Title IV of the Senate bill provided $12.5 million for drought
assistance to be provided by the Corps of Engineers and the Bureau
of Reclamation at the Department of the Interior. The FY2006
conference agreement includes $9.0 million for these activities under
Title II, as shown in Table 21.
! Title V of the Senate bill provided $648 million for port security
enhancements, discussed previously in this report. The FY2006
conference agreement includes no funding for this activity, as
discussed previously in this report.
! Title IX of the Senate bill provided $1.0 for the Environmental
Protection Agency to assess and monitor the waters of Hawaii. The
FY2006 conference agreement includes funding for similar activities
under Title II.
Pandemic Influenza Prevention and Preparedness. As agreed to by
the Senate, Title VI of the FY2006 supplemental appropriations included $2.6 billion
for pandemic influenza preparedness activities at the Department of Health and
Human Services (HHS). The amount included not only the initial $2.3 billion
recommended by the Senate Committee on Appropriations in S.Rept. 109-230, but
also $289 million added by an amendment by Senator Edward Kennedy on the Senate
floor to compensate persons harmed by pandemic influenza vaccines. The initial
$2.3 billion included, among other amounts, $300 million for state and local
governments, $50 million for laboratory capacity and research at the Centers for
Disease Control and Prevention (CDC), and at least $200 million for CDC global and
domestic disease surveillance, research, risk communication, rapid response, and
quarantine. The $2.3 billion amount was first requested by the Administration for
FY2007 as part of a three-year (FY2006 through FY2008) emergency supplemental
request for pandemic flu in November 2005, without a detailed breakdown.
Congress provided funding for only the FY2006 request (in P.L. 109-148), and the
$2.3 billion amount was again requested as an “allowance” in the FY2007 budget
proposal, with HHS noting that a formal request for the funds would be transmitted
to the Congress at a later date.128 In its April 25, 2006 statement of administration
128 For background information on pandemic flu, please see CRS Report RL33145,
(continued...)

CRS-99
policy, the Administration specifically endorsed additional funds for pandemic
influenza prevention and preparedness without actually agreeing to a specific funding
level.
The FY2006 conference agreement includes $2.3 billion for pandemic influenza
preparedness activities at HHS, but provides no funding to compensate persons
harmed by pandemic influenza vaccines.
128 (...continued)
Pandemic Influenza: Domestic Preparedness Efforts, by Sarah A. Lister.

CRS-100
Appendix A — Department of Defense FY2006 War-Related Supplemental Request and Prior
Funding by Account
($s — billions)
FY2006
Total
FY2006
Revised
FY2006
FY2006
FY2004
FY2005
Bridge, P.L.
Supp.
FY2006 Total
House
Senate
FY2006
Title/account
Obligationsa
Enactedb
109-148
Requestc
with Requestd
Supp.
Supp.
Conference
Mil Pers, Army
11.97
14.52
4.71
6.51
11.22
6.51
6.67
6.59
Mil Pers, ARNG
0.00
0.29
0.23
0.10
0.33
0.10
0.12
0.11
Mil Pers, AR
0.00
0.20
0.14
0.13
0.26
0.17
0.15
0.14
Mil Pers, Navy
0.86
0.54
0.14
0.76
0.91
1.06
1.07
1.32
Mil Pers, Navy Reserve
0.00
0.01
0.01
0.11
0.12
0.11
0.12
0.11
Mil Pers, MC
0.92
1.36
0.46
0.83
1.29
0.83
0.86
0.84
Mil Pers, MCR
0.00
0.00
0.00
0.01
0.01
0.01
0.01
0.01
Mil Pers, AF
3.27
2.01
0.51
1.15
1.65
1.15
1.20
1.16
Mil Pers, ANG
0.00
0.00
0.00
0.00
0.00
0.00
0.01
0.00
Mil Pers, AFR
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
Subtotal: Military Personnel
17.02
18.93
6.20
9.60
15.79
9.93
10.21
10.28
O&M, Army
29.97
31.36
21.35
18.05
39.40
18.38
17.59
17.74
O&M, AR
0.00
0.03
0.05
0.10
0.15
0.10
0.10
0.10
O&M, ARNG
0.00
0.33
0.18
0.18
0.36
0.18
0.18
0.18
O&M, Navy
2.55
3.46
1.81
2.79
4.60
2.79
2.83
2.70
O&M, NR
0.00
0.08
0.01
0.24
0.24
0.24
0.24
0.08
Facilities Sustainment, Navy
0.00
0.07
0.00
0.00
0.00
0.00
0.00
0.00
O&M, MC
1.57
2.61
1.83
1.62
3.46
1.72
1.59
1.64
O&M, MCR
0.00
0.02
0.03
0.06
0.08
0.06
0.09
0.09
O&M, AF
6.13
6.06
2.48
6.09
8.57
5.33
6.06
5.58
O&M, AFR
0.00
0.02
0.01
0.02
0.02
0.02
0.02
0.02
O&M, ANG
0.00
0.04
0.01
0.03
0.04
0.03
0.03
0.03
O&M, Defensewide
4.79
3.46
0.81
3.54
4.34
3.25
2.88
2.83
O&M, Defwide: Coalition Support
[1.15]
[1.22]
0.00
[1.50]
[1.50]
[1.20]
[0.74]
[0.74]

CRS-101
FY2006
Total
FY2006
Revised
FY2006
FY2006
FY2004
FY2005
Bridge, P.L.
Supp.
FY2006 Total
House
Senate
FY2006
Title/account
Obligationsa
Enactedb
109-148
Requestc
with Requestd
Supp.
Supp.
Conference
O&M, Defwide: Coop. Threat Reduction
0.00
0.00
0.00
[.045]
[.045]
[.045]
[0.04]
[0.00]
O&M, For. Sov. Union Treat Reduction
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.05
O&M, Defwide: Transfer to Coast Guard
0.00
0.00
0.00
0.00
0.00
0.00
[0.08]
[0.08]
Subtotal: O&M
45.01
47.54
28.57
32.71
61.27
32.10
31.60
31.03
Iraq Freedom Fund (IFF)a
0.00
3.80
4.66
0.10
4.76
0.00
0.03
0.00
Transfer from IFF to Coast Guard
0.00
-0.10
-0.10
0.00
-0.10
0.00
0.00
0.00
Afghan. Sec. Forces Fund
0.00
1.29
0.00
2.20
2.20
1.85
1.91
1.98
Iraq Security Forces Fund
0.00
5.70
0.00
3.70
3.70
3.01
3.70
3.01
Joint Improvised Explos. Defeat Funde
0.00
0.00
0.00
0.00
0.00
0.00
1.96
1.96
Subtotal: Special Funds
0.00
10.69
4.56
6.00
10.56
4.86
7.60
6.87
Working Capital Fund
0.97
2.02
2.52
0.52
3.03
0.50
0.52
0.52
Nat’l Def. Sealift Fd.
0.00
0.03
0.00
0.00
0.00
0.00
0.00
0.00
Subtotal: Revolving & Mgt Funds
0.97
2.05
2.52
0.52
3.03
0.50
0.52
0.52
Defense Health
0.89
0.89
0.00
1.15
1.15
1.15
1.15
1.15
Office of Inspector Gen’l
0.00
0.00
0.00
0.00
0.00
0.01
0.00
0.01
Drug Interdiction
0.00
0.24
0.03
0.19
0.22
0.16
0.16
0.15
Subtotal: Other Defense Programs
0.89
1.13
0.03
1.34
1.37
1.32
1.31
1.31
Aircraft Proc, Army
0.00
0.47
0.23
0.35
0.58
0.53
0.53
0.35
Missile Proc, Army
0.00
0.35
0.06
0.20
0.26
0.20
0.20
0.20
Proc, Wpns, Tracked Combat Veh., Army
0.05
2.87
0.86
1.13
1.99
1.98
1.59
1.77
Proc, Ammo, Army
0.11
0.64
0.27
0.83
1.10
0.83
0.83
0.83
Other Proc, Army
3.21
8.78
3.17
6.79
9.97
7.53
6.29
5.82
Aircraft Proc, Navy
0.22
0.27
0.14
0.15
0.29
0.29
0.41
0.52
Proc Ammo, Navy and Marine Corps
0.00
0.17
0.04
0.32
0.36
0.33
0.33
0.32
Wpns Proc, Navy
0.00
0.07
0.12
0.06
0.17
0.09
0.06
0.06
Other Proc, Navy
0.07
0.08
0.05
0.06
0.10
0.11
0.14
0.06
Proc, Marine Corpsb
0.53
3.51
1.71
2.58
4.29
3.26
2.58
2.58
Proc Ammo, AF
0.00
0.01
0.00
0.03
0.03
0.03
0.03
0.03
Other Proc, AF
0.31
2.69
0.02
1.48
1.49
1.49
1.45
1.50

CRS-102
FY2006
Total
FY2006
Revised
FY2006
FY2006
FY2004
FY2005
Bridge, P.L.
Supp.
FY2006 Total
House
Senate
FY2006
Title/account
Obligationsa
Enactedb
109-148
Requestc
with Requestd
Supp.
Supp.
Conference
Aircraft Proc, AF
0.05
0.28
0.12
0.35
0.46
0.66
0.68
0.68
Missile Proc, AF
0.00
0.00
0.02
0.00
0.02
0.00
0.00
0.00
Proc, Defwide
0.25
0.69
0.18
0.33
0.51
0.33
0.33
0.33
Nat’l Guard & Reserve Equipment
0.00
0.05
1.00
0.00
1.00
0.00
0.00
0.00
Rescission of PL 109-13 funds
0.00
0.00
0.00
0.00
0.00
0.00
0.00
-0.12
Subtotal: Procurement
4.80
20.93
7.99
14.64
22.62
17.68
15.45
14.91
RDT&E, Army
0.00
0.04
0.01
0.40
0.42
0.42
0.06
0.05
RDT&E, Navy
0.02
0.20
0.00
0.13
0.13
0.12
0.13
0.13
RDT&E, AF
0.00
0.14
0.01
0.06
0.08
0.31
0.38
0.38
RDT&E, Defensewide/b/
0.03
0.25
0.03
0.15
0.17
0.15
0.15
0.15
Subtotal: RDT&E
0.05
0.63
0.05
0.74
0.79
1.00
0.71
0.71
Mil Con, Army
0.11
0.85
0.00
0.34
0.34
0.29
0.21
0.19
Mil Con, Navy
0.00
0.14
0.00
0.00
0.00
0.00
0.00
0.00
Mil Con, AF
0.26
0.14
0.00
0.03
0.03
0.04
0.03
0.03
Mil Con, Defensewide
0.00
0.00
0.00
0.04
0.04
0.00
0.04
0.02
Subtotal: Mil.Con/Family Hsg
0.37
1.13
0.00
0.41
0.41
0.32
0.28
0.24
Intelligence f
5.30
[5.10]
[3.05]
[ 2.60]
[5.65 ]
NA
NA
NA
Rescission of FY2005 Supp.
0.00
0.00
0.00
-0.04
-0.04
0.00
0.00
0.00
Total g
74.41
103.03
49.92
65.91
115.81
67.72
67.67 I
65.86
Transfer authority h
[3.00]
[4.50]
[2.50]
[4.00]
[6.50]
[2.00]
[2.00]
[2.00]
General Provision reducing DOD war &
-.-
-.-
-.-
-.-
-.-
-.-
-1.90 I
0.00
hurricane funds I
a. Obligations data from Department of Defense, Defense Finance Accounting Service (DFAS), Supplemental & Cost of War Execution Report as of September 30, 2004; reflects
contractual costs.
b. CRS calculations based on public laws and DOD obligation reports. FY2005 enacted included funds appropriated in the FY2004/FY2005 bridge supplemental (Title IX, P.L.108-
287) that were available as of the beginning of FY2005 plus funds appropriated in the FY2005 Supplemental (P.L. 109-13). The funds provided in P.L. 108-287 were available
upon enactment; DOD obligated $1.9 billion of the $25 billion appropriated in FY2004 leaving $23.1 billion available for FY2005. Total for enacted also reflects transfers by
DOD of Title IX funds and from DOD’s baseline program for the global war on terrorism.
c. Reflects Administration revised request, OMB Estimate No. 6, May 18, 2006, plus original request, OMB Estimate No. 3, Feb. 16, 2006.

CRS-103
d. Total for FY2006 reflects sum of FY2006 bridge supplemental (Title IX, P.L.109-148) and the Administration’s request of February 16, 2006; see OMB, FY2006 Supplemental
Request, Estimate No. 3, FY2006 Emergency Appropriations (various agencies), Ongoing Military, Diplomatic and Intelligence Operations in the Global War on Terror,
Stabilization and Counterinsurgency Activities in Iraq and Afghanistan, and Other Humanitarian Assistance, 2-16-06; [http://www.whitehouse.gov/omb/budget/amendments
/supplemental2_2_16_06.pdf]; and Department of Defense, FY 2006 Supplemental Request For Operation Iraqi Freedom (OIF) and Operation Enduring Freedom (OEF),
February 2006; [http://www.dod.mil/comptroller/defbudget/fy2007/FY06_GWOT_Supplemental_Request_-_FINAL.pdf].
e. Request and House bill include $1.958 billion to counter IEDs in three accounts: O&M, Army ($490 million), Army, Other Procurement ($1.111 billion), and Army RDt&E ($358
million).
f. DOD appropriations include funds for both national intelligence, administered by the intelligence agencies, and military and tactical intelligence, administered by DOD. Limits on
total funds are set in appropriations acts and the funds are distributed among various accounts; details are classified.
g. DOD totals exclude transfers to other agencies.
h. Congress sets limits on the total amount of funds within each bill that can be transferred between accounts after enactment.
I. The Senate adopted an amendment providing $1.9 billion for border security, to be offset by an unspecified cut of $1.9 billion in DOD funds for both war costs (title I) and hurricane
rehabilitation (title II). The Administration would determine the distribution of the cut among programs in both titles. Consequently, the $67.67 billion Senate total for war costs
could fall somewhere in the range of $65.77 billion and $67.67 billion, depending on how the reductions would be allocated.